In a functioning market, people will buy a good up to the point where:
A. the marginal benefit of the last unit is equal to the marginal cost of that unit.
B. the marginal benefit of each unit is equal to the marginal cost of each unit.
C. they can no longer afford it.
D. the total benefit of the good is equal to the total cost of the good.
Answer: A
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Travel insurance (which pays a traveler if the traveler needs to cancel his or her trip) has a clause that states it will not pay if the trip is cancelled because of a pre-existing condition
If sick people are more likely to purchase travel insurance, this clause is meant to A) reduce moral hazard. B) reduce adverse selection. C) increase moral hazard. D) increase adverse selection.
Describe the major sources of tax revenue and expenditures for the federal government
Refer to Figure 8.6, which shows just three of a firm's various possible short-run average cost curves. Suppose the firm increases its output from 130 units to 160 units. Which of the following statements is true?
A. The average cost of producing the 160 units would be $90 if the firm expected the increase in production to be permanent.
B. The average cost of producing the 160 units would be $80 if the firm expected the increase in production to be permanent.
C. The average cost of producing the 160 units would be $175 if the firm expected the increase in production to be temporary.
D. The average cost of producing the 160 units would be $80 if the firm expected the increase in production to be temporary.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50If a manager adopted both project A and B simultaneously, the expected value of this joint project would be:
A. 40. B. 10. C. 20. D. 30.