Hans decides to start brushing his teeth less often after signing up for dental insurance. This is an example of:
A. adverse selection.
B. moral hazard.
C. neither adverse selection nor moral hazard.
D. both adverse selection and moral hazard.
Answer: B
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If the overall price level decreases, then the aggregate demand curve will shift to the right
a. True b. False Indicate whether the statement is true or false
Assume that for good X the supply curve for a good is a typical, upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. If the good is taxed, and the tax is doubled, the
a. base of the triangle that represents the deadweight loss doubles. b. height of the triangle that represents the deadweight loss doubles. c. deadweight loss of the tax quadruples. d. All of the above are correct.
Gus takes his $15 in lemonade stand earnings and deposits it into his savings account. Meanwhile, Gus's dad borrows $20,000 to buy a new family car. Gus's $15 represents a(n) ____ for the bank, while his dad's $20,000 loan represents a(n) ____ for the bank.
a) asset; asset b) liability; liability c) asset; liability d) liability; asset
Ceteris paribus, which of the following causes demand to be more elastic with respect to price?
A. Shorter periods of time to adjust to a change in price. B. Fewer substitutes. C. A high ratio of price to income. D. A steeper demand curve for a given price and quantity.