Ben's cost of making an additional rocking chair is $75
A) If he sells it for a $100, his producer surplus is $25.
B) His marginal cost is equal to $75.
C) The marginal benefit to the consumer from the chair will be $75.
D) Both answers A and B are correct.
E) Both answers B and C are correct.
D
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The problem of adverse selection in health insurance leads to a situation in which
A) health insurance covers inappropriate items for the population it serves. B) overinsurance of the premium-paying population occurs. C) underinsurance of the premium-paying population occurs. D) the percentage of the premium-paying population that is healthy rises, squeezing unhealthy individuals out of the market. E) the percentage of the premium-paying population that is unhealthy rises, squeezing healthy individuals out of the market.
A vertical line showing the economy's potential is called the:
A. long-run aggregate supply line. B. short-run aggregate supply line. C. short-run equilibrium output line. D. aggregate demand curve.
Economists are fond of calculating measures of elasticity. If we calculate the income elasticity of money as the %?M / %?PY, where M is the quantity of money held and PY is nominal income, would you suspect the coefficient to be positive, negative or zero? Will the absolute value be greater or less than 1? Be sure to explain your choices.
What will be an ideal response?
A measure of how easy and quickly an asset such as corporate sock can be converted into cash by selling it.
What will be an ideal response?