Figure 14.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. The insurance companies estimate that 40% of its customers are high-cost type. If the insurance companies set the price equal to their average cost per customer, what is the insurance companies' average cost per customer ($Y)?
A. $4,000
B. $3,400
C. $2,800
D. $2,000
Answer: C
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Refer to the above figures. Which panel(s) represent the effect of an increase in the price level?
A) Panel A only B) Panels A and C only C) Panel D only D) none of the panels
For a competitive firm, the value of output ___________ and the marginal product of labor ___________ with each additional worker hired.
A. stays constant; decreases B. increases; decreases C. increases; increases D. decreases; stays constant
Assume a nation has a fixed exchange rate, and the central bank increases the required reserve ratio. What is the net effect on the monetary base (given fixed exchange rates)? Answer assuming all the adjustments have worked their way through the macroeconomic system, and it is in equilibrium
a. The monetary base rises. b. The monetary base falls. c. The monetary base is not affected in this example. d. The monetary base can not change because of the "Impossible Trilogy." e. The change in the monetary base is ambiguous.
When the court determines that a firm's size alone is sufficient to find that it violated antitrust laws, this criterion is called:
A. natural monopoly. B. economies of scale. C. per se. D. rule of reason.