Because the federal government typically provides disaster relief to farmers, many farmers do not buy crop insurance even through it is federally subsidized. This illustrates:
A. the adverse selection problem.
B. the moral hazard problem.
C. the special interest effect.
D. logrolling.
Answer: B
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For a firm that uses land, labor and capital as inputs, how should the inputs be utilized in order to minimize total costs?
What will be an ideal response?
If the U.S. price level increases relative to price levels in foreign countries, _____
a. the aggregate supply curve for the U.S. will shift outward and the aggregate demand curve would remain unchanged b. the aggregate supply curve for the U.S. will shift inward and the aggregate demand curve would remain unchanged c. the aggregate demand curve for the U.S. will shift outward and the aggregate supply curve would remain unchanged d. the aggregate demand curve for the U.S. will shift inward and the aggregate supply curve would remain unchanged e. both the aggregate demand and the aggregate supply curves for the U.S. will shift outward
Economic models do not have to completely describe every aspect of the economy in order to be useful
a. True b. False
While producing less than the competitive output decreases social welfare, the same cannot be said about producing more than the competitive output
Indicate whether the statement is true or false