Jennifer Borts moves her office from the premises she rents at a local mall to her home. As a result of this move
A) Jennifer's explicit costs fall and her implicit costs rise.
B) Jennifer's total costs fall.
C) Jennifer's implicit costs fall.
D) Jennifer's opportunity costs fall.
Answer: A
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Suppose an insurance company has estimated that 20 percent of all of its potential policy owners are high-cost and sets a price for their insurance policy with the understanding that 20 percent of its policy owners will be high-cost. If the true percentage of high-cost potential policy owners is 40 percent, the insurance company is likely to face ________.
A) moral hazard B) the principal-agent problem C) adverse selection D) the bad apple problem
The basic forces driving the "invisible hand" are
a. government and business. b. information and computer technology. c. competition and self-interest. d. cooperation and altruism.
An important difference between perfect competition and monopoly is
A. the monopoly faces an inelastic demand curve and the perfect competitor faces an elastic demand curve. B. a monopoly is profitable and a perfect competitor is not. C. a monopoly is not regulated by the market, while a perfect competitor is regulated by the market. D. the monopoly faces a downward sloping demand curve and the perfect competitor faces a horizontal demand curve.
Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. Suppose demand for wheat is initially D2. If consumer incomes decrease, then demand for wheat will shift to ________. This will ________ the equilibrium price of wheat and individual profit-maximizing firms will produce ________ bushels of wheat.
A. D3; increase; 15 B. D1; increase; 10 C. D1; decrease; 0 D. D3; decrease; 7