Buying insurance is similar to
A) selling risk.
B) irrationally avoiding life's risks.
C) being a free rider.
D) buying risk.
A
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Over the business cycle, real GDP fluctuates around
A) the business cycle trough. B) the business cycle peak. C) nominal GDP. D) potential GDP. E) the Lucas Wedge.
When the slope of the total revenue curve is equal to the slope of the total cost curve
A) profit is maximized. B) marginal revenue equals marginal cost. C) the marginal cost curve intersects the total average cost curve. D) the total cost curve is at its minimum. E) Both A and B
Bargaining costs are generally high in cases involving environmental externalities because
a. there are strong incentives to be a free rider. b. many individuals may be affected by the externalities. c. it is difficult to measure the costs of the externalities. d. all of the above.
Any point inside the production possibilities frontier is called
A) full employment. B) unemployment. C) efficient. D) unobtainable.