The demand curve for a perfectly competitive industry is
A. unit elastic.
B. perfectly inelastic.
C. perfectly elastic.
D. downward sloping.
Answer: D
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
The effective rate of protection is
(a) value added with protection divided by value added without protection. (b) value added with protection. (c) value added without protection. (d) (value added with protection minus value added without protection) divided by value added without protection.
Sarah's demand for routine medical visits is q = 10 - 0.2p when she is healthy and q = 20 - 0.2p when she is sick. Medical visits cost $50 each if Sarah has no medical insurance. She is sick 20% of the time
Sarah is considering two different insurance plans. One offers free medical visits; the other plan costs less up front but requires that Sarah pay $5 per medical visit. Compare the two plans in terms of the trade-off between risk and moral hazard.
If you win $1 million in a lottery and are paid in installments,
a. the future value of these payments is $1 million b. the present value of these payments equals $1 million if the interest rate is zero c. the present value of these payments equals $1 million if the interest rate is 10 percent annually d. the present value of the payments exceeds $1 million if the interest rate is positive e. the future value of the payments is less than $1 million if the interest rate is negative