Andy does not bother to lock the door to his house because he has theft insurance. This is an example of:
A. a positive spillover.
B. moral hazard.
C. adverse selection.
D. irrational behavior.
Answer: B
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What is the profit maximizing rule for firms? (i.e. how do they decide what output to produce?) b. Explain why this approach will maximize profits for a firm.
The official unemployment rate might underestimate the underutilization of labour resources for all of the following reasons except ________.
A) it excludes people who are waiting to be called back to jobs from which they have been laid off B) it excludes marginally attached workers C) it excludes discouraged workers D) it excludes part-time workers who want full-time jobs E) the official unemployment rate excludes all of the above
If interest rates go down, which of the following would most likely occur:
A. Banks will pay more to borrow money. B. The stock market will go up. C. Consumers will spend less. D. U.S. exports will decrease.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions. B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions. C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions. D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.