A person who practices poisonous snake charming and does not reveal this to her health insurance company before purchasing insurance is an example of
A) moral hazard.
B) adverse selection.
C) signaling.
D) screening.
B
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Business cycles are
A) irregular, with some having two recessions and no expansion. B) predictable, with a recession following a trough. C) unpredictable, but always have two phases and two turning points. D) unpredictable, and don't always have two phases and two turning points.
Compared to an electronic payments system, a payments system based on checks has the major drawback that
A) checks are less costly to process. B) checks take longer to process, meaning that it may take several days before the depositor can get her cash. C) fraud may be more difficult to commit when paper receipts are eliminated. D) legal liability is more clearly defined.
Suppose there are four buyers all considering purchasing round-trip airfare from Boston to Miami with the following price elasticities of demand for this purchase: Buyer A: 1.5, Buyer B: 0.7, Buyer C: 1.0, Buyer D: 2.3. If the airline knows of these elasticities and practices price discrimination, which buyer will pay the highest price for the airfare?
A. Buyer A B. Buyer B C. Buyer C D. Buyer D
If supply is inelastic, then a demand shift will have a ____ effect on _______ than on quantity.
A. smaller; price B. smaller; supply C. bigger; price D. bigger; supply