A consequence of adverse selection for the insurance market is that:
A. risk-seeking individuals typically pay higher premiums than risk-averse individuals.
B. everyone ends up paying lower premiums.
C. everyone ends up paying higher premiums.
D. risk-averse individuals typically pay higher premiums than risk-seekers.
Answer: C
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Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?
A) export promotion B) import substitution C) international commodity agreements D) Infant Industry promotion E) intra-industry trade practice
Which one of the following would cause an increase in the supply of planes?
A. an improvement in the technology used to produce planes B. an increase in the price of planes C. an increase in taxes applied to plane producers D. a decrease in the demand for planes
Total profit equals
A. TR ? TC. B. average profit times total output. C. total sales revenue minus total cost. D. All of the responses are correct.
If a firm is currently in short-run equilibrium earning a profit, what impact will a lump-sum tax have on its production decision?
A) The firm will decrease output to earn a higher profit. B) The firm will increase output but earn a lower profit. C) The firm will not change output but earn a lower profit. D) The firm will not change output and earn a higher profit.