One of the solutions to the adverse selection problem in insurance is
a. Is to require that only the high risk individuals to buy insurance
b. Is to require that only the low risk individuals buy insurance
c. Is to require everyone to buy insurance
d. Is to completely ban insurance companies
c
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A firm sells 20 units of a good at a price of $5 per unit. If the average cost of production of the good equals $3 per unit, the firm's revenue is:
A) $40. B) $60. C) $100. D) $120.
Producer surplus is the price of a good minus the opportunity cost of producing it, summed over the quantity produced
Indicate whether the statement is true or false
Individuals base their demand for an asset on
A) the expected return the asset offers compared with the returns offered by other assets. B) the riskiness of the asset's expected return. C) the asset's liquidity. D) the expected return, how risky that expected return is, and the asset's liquidity. E) the aesthetic qualities of the asset.
The federal government debt refers to
A) the accumulation of past budget deficits. B) government spending plus transfer payments minus tax revenues. C) tax revenues minus government spending and transfer payments. D) the total value of U.S. Treasury bonds outstanding.