During a severe winter, the price of home heating oil is expected to be more than it would be during a normal winter
What will be an ideal response?
True. During a severe winter, people need to operate their furnace more often than in a normal winter. The demand for home heating oil lies to the right of where it would be under normal weather conditions. As a result, the price of oil rises.
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In the context of insurance, moral hazard refers to:
A. the tendency for people to behave in a riskier way after they have acquired insurance. B. the tendency for high-risk individuals to seek out more insurance than low-risk individuals. C. when people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. D. when risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual.
The net change in quantity demanded of a good following a price change
a. is equivalent to the substitution effect b. is equivalent to the income effect c. must decrease as marginal utility rises d. is negative only when the income effect is negative e. reflects both the substitution and income effects
A soil bank program usually accompanies a price ceiling program in agriculture
Indicate whether the statement is true or false
In the aggregate demand and aggregate supply model,
a. the factors that cause the demand curves in both models to slope downward are the same b. the factors that cause the supply curves in both models to slope upward are the same c. the upward-sloping aggregate demand curve intersects the downward-sloping aggregate supply curve to determine the economy's price level and GDP d. the upward-sloping aggregate supply curve intersects the downward-sloping aggregate demand curve to determine the economy's price level and GDP e. the price level never changes even with shifts in aggregate demand and aggregate supply