For superstar athletes
A. their entire earnings are economic rent.
B. none of their earnings are economic rent since they will do some other work once they are too old to be an athlete.
C. none of their earnings are economic rent since rent doesn't apply to labor.
D. part of their earnings are economic rent.
Answer: D
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Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are risk averse d. insurers can tell higher risk people from lower risk people
Many economists support trade agreements, maintaining that the agreements improve economic efficiency because they result in goods being produced
A) at the highest profit margin. B) with maximum deadweight loss. C) with zero producer surplus. D) at the lowest opportunity cost.
Mutual funds offer investors:
A. a lower return for less risk than what the investor could earn on his own. B. a greater return for greater risk than what an investor can earn on his own. C. a lower return for more risk than what the investor could earn on his own. D. a way for individuals to eliminate the idiosyncratic risk associated with any single investment.
When output is greater than the economy's long-run capacity, which of the following is most likely to occur?
a. a reduction in the general level of prices b. an abnormally high rate of unemployment c. increases in real interest rates and real resource prices d. a reduction in imports