Samantha is at a friend's house for dinner. Her friend says "I can re-heat either the lasagna or the fried rice." Samantha likes them both, but chooses the fried rice. Does Samantha's choice entail a cost?
A) No—as long as her friend didn't charge Samantha for the meal.
B) Yes—Samantha sacrificed the opportunity to eat lasagna.
C) Yes—as long as Samantha reimburses her friend for the cost of re-heating the meal.
D) Both A and C above.
B
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Adverse selection:
A. is about actions and occurs after the parties have voluntarily entered into an agreement. B. is always present when moral hazard arises. C. relates to unobserved characteristics of people or goods and occurs before the parties have entered into an agreement. D. All of these statements are true.
The percentage of the population classified as poor in 2010 was approximately
a. 7 percent. b. 15 percent. c. 21 percent. d. 25 percent.
The Phillips curve represents a direct relationship between the inflation rate and the unemployment rate
a. True b. False Indicate whether the statement is true or false
To achieve a high standard of living, a nation should: a. increase welfare payments to the poor
b. use less capital and more labor in the production process. c. promote economic growth. d. increase the tax deduction for child dependents.