Which of the following make(s) insurance premiums higher than otherwise?
a. adverse selection and moral hazard
b. adverse selection, but not moral hazard
c. moral hazard, but not adverse selection
d. neither adverse selection nor moral hazard
a
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How do financial intermediaries reduce risk?
What will be an ideal response?
When does the problem of adverse selection arise in any market?
Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)
a. decrease in the demand for printers and a decrease in the quantity supplied of printers. b. decrease in the supply of printers and a decrease in the quantity demanded of printers. c. decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers. d. increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.
In the long run, the main reason that a monopolist can earn positive economic profits while a perfectly competitive firm cannot is:
A. monopolists enjoy greater economies of scale. B. there are no barriers to entry in a perfectly competitive market. C. the monopolist faces an inelastic demand for its product. D. perfectly competitive firms face greater opportunity costs.