Efficiency in risk bearing implies that
A) risk is completely eliminated.
B) the least risk-averse party bears most of the risk.
C) the most risk-averse party bears most of the risk.
D) all of the risk is borne by just one of the parties regardless of the degree of risk aversion.
B
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When the price of a good is below its equilibrium level under perfect competition,
A. consumers would benefit from an expansion of output. B. some consumers are earning larger consumer’s surpluses than they would in equilibrium. C. the market is not operating at maximum efficiency. D. All of the responses are correct.
An American investor purchasing a Japanese government bond
a. creates a demand for dollars and a supply of yen in the foreign exchange market. b. creates a demand for yen and a supply of dollars in the foreign exchange market. c. causes the yen to depreciate. d. causes the dollar to appreciate.
In order for the standard of living within a country to be enhanced over time, which of the following is essential?
a. The role of the country's government in the economy must become larger. b. The population of the country must increase. c. More domestic natural resources must be discovered and used. d. The level of productivity must increase.
Why is there often resistance to free trade?
A. Free trade does not benefit the economy as a whole. B. Specific groups may be hurt by free trade. C. Free trade usually hurts consumers. D. Free trade does not benefit the global economy.