From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the:
A. opportunity costs of more insurance coverage are greater than the payment for more insurance coverage.
B. marginal benefits of more insurance coverage are greater than the marginal costs.
C. marginal benefits of more insurance coverage have decreased.
D. marginal costs of more insurance coverage have increased.
Answer: B
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Indicate whether the statement is true or false
Which of the following events best exemplifies the concept of signaling?
a. A college student's parents, having learned that their child is short of money, send her a check for $1,000. b. A new company making high quality bicycles at a reasonable price sends free bikes to reviewers working for bicycle magazines. c. A grocery store maintains a policy of examining the driver's license of everyone who writes a personal check to purchase his groceries. d. A university maintains a policy of considering for admission only those students who graduated among the top ten percent of their high school class.
When a good ends up undersupplied, we can assume it is a:
A. private good. B. public good. C. common resource. D. transitory good.
A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
A) a public good. B) a merit good. C) an externality. D) the free-rider problem.