Private insurance companies have been out of the flood insurance business for decades. After their departure the government has gone into the business by granting coverage with below-market premiums
Why might this be in inefficient outcome? Comment on the amount of housing that we should expect to see along our nation's coastlines. Also, discuss the degree of danger that this poses for both property and lives when hurricanes strike.
It encourages people to build or stay in homes in risky low-laying areas. If these homeowners faced the true cost of their decisions there would likely be less build up of residential construction along the coastlines and hurricanes would also be less deadly since fewer people would reside in these areas.
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Long-lived goods used to produce other goods and services are called:
A. human capital. B. inventories. C. financial capital. D. physical capital.
Which of the following would NOT be considered a determinant of marginal productivity?
A) talent B) gender C) experience D) training
In economics, the concept of opportunity cost is:
a. negated by ensuring that the government has a role in a capitalist society. b. defined to be the highest-valued alternative that must be forgone when a choice is made. c. best illustrated by knowing why consumers choose one good over another. d. quantifiable only if you know the real dollar price of the goods and services you are giving up to consume something. e. the methodology that government economists use to determine the total amount of the national debt.
Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a
a. shortage to exist and the market price of roses to increase. b. shortage to exist and the market price of roses to decrease. c. surplus to exist and the market price of roses to increase. d. surplus to exist and the market price of roses to decrease.