How does insurance reduce risk?
What will be an ideal response?
Insurance reduces the risk any individual faces because insurance pools risks. Everyone pays into the pool but only the small fraction of people who suffer a loss are paid from the pool. Essentially people reduce the risk of a large adverse financial outcome in exchange for the small, certain payment to the insurance company.
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If the government liberalizes immigration policies, the demand for labor will ________, the real wage will ________, and the quantity of labor hired will ________
A) remain the same; decrease; increase B) increase; decrease; remain the same C) remain the same; decrease; decrease D) remain the same; increase; decrease
Maria can work as a coal miner, where the probability of being killed in a work-related accident is 5/8,000, or she can earn work as a truck driver, where the probability of being killed in a work-related accident is 2/8,000
Using the compensating differential approach, the value of Maria's life is $4 million. How much more per year will working as a coal miner pay than working as a truck driver? A) $1,500 B) $2,000 C) $2,500 D) $3,500
Other things equal, it can be concluded that in Figure 6-1, that
A. D1 is the more elastic demand curve than D2, but only below P2. B. D1 is the more elastic demand curve than D2. C. D1 is the less elastic demand curve than D2. D. D1 is the more elastic demand curve than D2, but only above P2.
Proprietorships are
A) the most common form of business organization in the country. B) responsible for most of the profits in the country. C) generally large relative to other business organizations. D) easy to form but difficult to dissolve.