When productive activities are organized according to the principle of the division of labor
A) scarcity is eliminated.
B) we do not devote enough resources for capital investment.
C) total output increases due to the advantages of specialization.
D) an inefficient outcome results.
C
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The optimal amount to spend on actions that decrease the probability of bad outcomes is the amount that sets the ________ of reducing the probability of a bad outcome equal to the ________ of the action(s) that reduce(s) the probability.
A) expected marginal benefit; expected marginal cost B) expected marginal benefit; marginal cost C) marginal benefit; expected marginal cost D) marginal benefit; marginal cost
A government budget deficit is
A) an excess of government spending over government revenues during a given time period. B) a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period. C) the total value of all outstanding federal government securities. D) all federal government debt irrespective of who owns it.
The percentage of national income spent on health care
A) has steadily decreased since 1965. B) has steadily increased since 1965. C) increased until the end of the 1970s and then decreased in the 1980s and 2000s. D) decreased until the end of the 1970s and then increased in the 1980s and 2000s.
An insured person's incentive to behave in ways that raise the probability of a claim is known as:
a. a moral hazard. b. the lemons problem. c. the problem of adverse selection. d. the problem of advantageous selection.