Which of the following is a problem of adverse selection?
A. The lender has a problem determining that the proceeds from a loan are being used as the borrower stated.
B. A person takes up the hobby of bungee jumping after purchasing health insurance.
C. The lender has a problem of distinguishing good risk from bad risk borrowers.
D. Individuals use more medical services as a result of their purchase of a health insurance plan.
Answer: C
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From the very beginning of our republic through the 19th century, the overriding and chronic problem we faced was too little currency
Indicate whether the statement is true or false
Which of the following statements is true for a normal good?
(a) An increase in income will result in an increase in supply, ceteris paribus. (b) An increase in income will result in an increase in demand, ceteris paribus. (c) An increase in income will result in an decrease in demand, ceteris paribus (d) An increase in income will have no effect on demand, ceteris paribus.
In Figure 3-7, suppose D1 and S1 indicate the initial conditions in the market for ice cream. Which of the following changes would tend to cause the shift from D1 to D2 in the market for ice cream?
a. a decrease in the price of sugar, an ingredient used to produce ice cream b. an increase in the price of frozen yogurt, a substitute for ice cream c. abnormally cold weather that decreased consumer desire for ice cream d. an increase in the price of milk, an ingredient used to produce ice cream
For me to stop getting speeding tickets for a year, I gave five friends devices that measure my driving speed. If I drove over the speed limit by more than 5 miles per hour, I would have to pay them each $1,000. This would be an example of:
A. sunk costs. B. a precommitment strategy. C. opportunity costs. D. a deductive decision.