Because most insurance companies insure many people, they do not have to worry about the problem of:
A. spreading of risk.
B. information asymmetry.
C. moral hazard.
D. adverse selection.
Answer: A
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In a direct, majority-rule vote,
a. all voters get what they want b. a majority of voters get exactly what they want c. only the median voter is completely satisfied d. a minority of voters are dissatisfied e. only the median voter is dissatisfied
The process of developing hypotheses, testing them against facts, and using the results to construct theories is called:
A. opportunity cost calculation. B. microeconomics. C. marginal analysis. D. the scientific method.
George believes that the inflation in this year will be around 9% because it was around 9% in the previous year. George can be said to have:
A) rational expectations. B) marginal expectations. C) adaptive expectations. D) composite expectations.
The total utility from three skirts is
A) three times the marginal utility of the third skirt. B) three times the price of a skirt. C) three skirts divided by total income. D) the sum of the marginal utility of the first skirt plus the marginal utility of the second skirt plus the marginal utility of the third skirt.