The reason some insurance customers are more eager to purchase insurance is
a. they are more risk averse
b. they are less risk averse
c. they have a greater risk of making a claim
d. A and C
d
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If the nominal interest rate increases without any change in the rate of inflation:
A) the ratio of real interest rate to nominal interest rate increases. B) the real interest rate increases. C) the real interest rate decreases. D) the real interest rate remains the same.
A unanimous decision rule is equivalent to market exchange in terms of efficiency
a. True b. False
Suppose that the demand for apples in Washington is elastic and the supply is inelastic. If the government of Washington passes a law prohibiting the use of synthetic pesticides that increases the marginal and average costs of producing apples, then:
a. the price of Washington State apples will decline. b. Washington will stop producing apples, and New York apple growers will benefit. c. apple growers will pass most of the increased costs on to consumers in the form of higher apple prices. d. apple growers will keep prices constant but reduce costs by advertising less. e. apple growers will bear most of the increased costs of regulation, and prices will increase only slightly.
An industry's typical percentage markup
a. should be expected to fluctuate wildly from year to year b. equals 1 - (average cost per unit/average revenue per unit) c. is determined by collusion d. is of price concern for the macroeconomy e. is relatively low if there is fierce competition among firms.