Because Don has health insurance, he is more likely to see the doctor when he has a cold. This is an example of
A) adverse selection.
B) moral hazard.
C) both moral hazard and adverse selection.
D) private information.
B
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Inferior goods are those for which demand increases as
A) the price of a substitute falls. B) the price of a substitute rises. C) income decreases. D) income increases.
Economic freedom is
A) the right to vote in an election for a political leader. B) the right to own private property and to exchange goods with minimal government interference. C) the amount of control that the government has in a market. D) present as long as private individuals own businesses.
When a firm's average revenue falls, the marginal revenue also falls and is less than the average revenue
a. True b. False Indicate whether the statement is true or false
During a recession:
a. Government spending automatically rises and taxes automatically rise. b. Government spending automatically falls and taxes automatically rise. c. Government spending rises automatically and taxes fall automatically. d. Government spending and taxes do not tend to change. e. None of the above.