James insured his car with a renowned insurance company that checked his driving skills and verified his accident records before insuring his car. After paying two premiums for this insurance, James took to drinking and driving. This action of James is likely to create:
a. an economic loss.
b. a positive externality.
c. an economic bad.
d. a moral hazard.
e. diseconomies of scale.
d
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Each governor on the Board of Governors can serve
A) only one nonrenewable fourteen-year term. B) one full nonrenewable fourteen-year term plus part of another term. C) only one nonrenewable eight-year term. D) one full nonrenewable eight-year term plus part of another term.
Using the aggregate expenditure-output model, assume the aggregate expenditures (AE) line is below the 45-degree line at full-employment GDP. This vertical distance is called a(n):
a. inflationary gap. b. recessionary gap. c. negative GDP gap. d. marginal propensity to consume gap.
What is likely to occur over the long run if it is easy for new firms to enter an oligopolistic industry?
a. The general level of prices will begin to approach average total cost. b. The general level of prices will rise well above average total cost. c. It will become easier for a cartel to form consensus about pricing decisions. d. The industry will become more oligopolistic and could trigger an antitrust probe.
In the ________________ of externalities, the market equilibrium is ______________ efficient because it maximizes the net social benefit.
a. absence; ecologically b. presence; ecologically c. absence; economically d. presence; economically e. absence; environmentally