One reason that lawyers might prefer a contingent contract when representing a plaintiff in a tort case is that
A) lawyers are risk neutral.
B) diversification of many cases allows lawyers to reduce risk.
C) lawyers are typically confident about winning every case.
D) hourly rates for lawyers are usually very low.
B
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Students in a class are assigned to groups to work on a project. A grade will be given for each project, and everyone in the group will receive that grade. For the members of a particular group, the grade is a
a. beneficial externality. b. public good. c. detrimental externality. d. moral hazard.
Which of the following is a possible rationing device?
A) dollar price B) first-come-first-served C) brute force D) a and b E) a, b, and c
How well did the Federal Reserve Banks perform during the Great Depression?
(A) The Chair of the Board of Governors made bad decisions and directed the Federal Reserve Banks to act in harmful ways. (B) The Federal Reserve System skillfully guided the United States economy out of the Great Depression. (C) Individual governors of the Federal Reserve Banks disagreed over policy and were unable to stop the depression. (D) The Great Depression took place before the Federal Reserve System was established.
Reducing the budget deficit by cutting government spending could conceivably:
A. increase income if interest rates rise enough and government spending is more productive than private investment. B. increase income if interest rates fall enough and private investment is more productive than government spending. C. decrease income if interest rates rise enough and private investment is more productive than government investment. D. decrease income if interest rates fall too much and private investment is more productive than government investment.