In a competitive separating equilibrium, low cost consumers of insurance will not fully insure because insurance rates offered to them are not actuarily fair.
Answer the following statement true (T) or false (F)
False
Rationale: Low cost consumers may not fully insure because, in a separating equilibrium, they are not offered a full menu of actuarily fair insurance policies. The zero profit condition still implies that competitive firms would offer actuarily air rates -- jut not the option of full insurance.
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If a tax is placed on suppliers of a good, then the incidence of the tax
A) falls more on the sellers if demand is elastic. B) falls more on the sellers if demand is inelastic. C) is usually split equally between the buyers and the sellers. D) usually falls more on the sellers than the buyers. E) usually falls more on the buyers than the sellers.
Disney World decides to charge local residents a lower price than other park visitors. This would fall under which field of economics?
A. Macroeconomics B. Microeconomics C. Customer service D. Public policy
The law of demand implies, holding everything else constant, that as the price of gelato
A) increases, the demand for gelato will increase. B) increases, the quantity of gelato demanded will increase. C) decreases, the quantity of gelato demanded will increase. D) decreases, the demand for gelato will increase.
Refer to the below graphs. The formation of an exclusive or craft union, with no change in demand, is depicted by situation:
A. A
B. B
C. C
D. D