Drivers with auto insurance being more likely to act carelessly is an example of:
A. adverse selection.
B. moral hazard.
C. asymmetric selection.
D. information optimization.
B. moral hazard.
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Earth Movers & Shakers operates 3 iron ore mines. The table below shows each mine's total daily production and the current number of miners at each mine. All miners work for the same wage, and each miner in any given mine produces the same number of tons per day as every other miner in that mine. Total TonsPer DayNumber ofMinersMother Lode10025Scraping Bottom3010Middle Drift7515The opportunity cost of moving one miner from Mother Lode to another mine is:
A. 4 tons per day. B. 1 ton per day. C. 2 tons per day. D. 3 tons per day.
Consumers often base their spending on their estimated permanent income
Indicate whether the statement is true or false
Which one of the following transactions would be included in GDP?
a. Ms. Kim pays $50 for a used picture frame at a neighborhood garage sale. b. Mr. Doe donates $500 to his town's junior college scholarship fund. c. Ms. Bartolini pays $500 to fix the front end of her car damaged in a recent accident. d. Ms. Smith pays $5,000 to purchase 100 shares of Microsoft stock (assume no sales commission is made on the exchange).
Which of the following examples could be included in the income approach to GDP?
a. a salary of $50,000 a year for working as a librarian b. a payment of $20 for a T-shirt c. spending $15 on imported beer d. the cost of $1 million for building a steel factory