If the marginal benefit from water pollution abatement increases, then it is efficient to:
A. reduce water pollution to zero.
B. allow more water pollution.
C. let the market determine water pollution.
D. reduce water pollution further, but maybe not to zero.
Answer: D
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Relative to when a patient has first-dollar medical insurance, the loss in total economic surplus would be smaller if:
A. medical care providers had to pay the full marginal cost of medical care. B. the patient had to pay at least some of the marginal cost of medical care. C. the patient had to pay less of the marginal cost of medical care. D. medical care providers had to pay more of the marginal cost of medical care.
Liabilities of the commercial banking system include
A. reserves and loans. B. reserves and deposits. C. loans and deposits. D. deposits.
"Your college didn't choose to admit you as a student." Your textbook authors make such a statement in order to
A) offend you. B) confuse you. C) remind you that beggars can't be choosers. D) emphasize that choices are made by particular individuals, even if they are in the name of organizations.
The risk of a borrower defaulting on a loan is known as:
A. credit risk. B. default risk. C. loan risk. D. asset risk.