A person covered by a generous insurance plan smokes more cigarettes than he does normally. This is an example of a:
a. lemon problem
b. moral hazard.
c. adverse selection.
d. risk selection.
b
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A(n) _________ is defined as a significant decline in economic activity spread across the economy, lasting more than a few months.
A. economic deficit B. depression C. regressive economy D. recession
Based on most observations, what are the effects on government budgets from the national health care program?
A) Tax revenues will not flow into the new program immediately. B) The federal government ultimately will have to search for ways to reduce its health care expenditures. C) Federal government expenditures on the program are being phased in immediately. D) the federal government ultimately will lower taxes since the program's cost will decline over time.
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
Use the figure below to answer the following question.
What is the amount of total surplus (for society) after the government imposes the excise tax on the market?
A. $32 B. $96 C. $100 D. $64