The so-called moral hazard problem refers to one's tendency to:
A. Buy less of something if one does not have good information about it
B. Avoid something that is considered risky or hazardous
C. Get insurance against some possible hazard or danger
D. Take on greater risk if one is at least partly insured against losses
D. Take on greater risk if one is at least partly insured against losses
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During times of high unemployment, colleges often observe an increase in enrollment even if tuition remains unchanged. Why?
A. The opportunity cost of attending college is higher when unemployment is high. B. The benefit of attending college is lower because college graduates are less likely to find jobs. C. The opportunity cost of attending college is lower when unemployment is high. D. Students go to college even when the net benefit is negative.
Because government services are not sold in markets,
A) they are excluded from measurements of GDP. B) the government tries to estimate their market value and uses this to measure the government's contribution to GDP. C) they are valued at their cost of production. D) taxes are used to value their contribution.
Suppose the long-run cost function is C = 2q2. What is the cost-output elasticity for this case?
A) 1 B) 2 C) 1/2 D) 4
Why does the U.S. government most likely distribute military spending to bases across the country?
a. To encourage support of defense spending b. To limit the power of defense contractors c. To meet the demands of special interest groups d. To ensure that defense budgets are adequate