Which of the following is an example of moral hazard?
a. There are likely more cars of low quality than of high quality offered for sale without warranties in the used car market.
b. An individual who eats well and exercises regularly chooses not to purchase health insurance
c. An individual drives less cautiously after obtaining automobile insurance.
d. A car salesman offers a full warranty on a used car for 90 days.
c
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Betty and Ann live on a desert island. With a day's labor, Ann can produce 6 fish or 4 coconuts; Betty can produce 3 fish or 1 coconut. Betty's opportunity cost of producing 1 fish is ________, and she should specialize in the production of ________
A) 1/3 coconut per fish; fish B) 2/3 coconut per fish; coconuts C) 1 coconut per fish; fish D) 4 coconuts per fish; fish
In order to have a meaningful measure of marginal utility, we must define the time period during which consumption is occurring
a. True b. False Indicate whether the statement is true or false
The broken window fallacy states that when a window breaks and someone spends money to repair it, they have created new economic activity that would not have otherwise taken place
a. True b. False Indicate whether the statement is true or false
Which of the following businesses is experiencing economies of scale?
a. With each additional tool Gravel Lane Foundry makes, its long-run average total costs goes up. b. Helena’s Expeditions Inc. could serve more customers if only she could hire more experienced guides. c. Average total costs are declining at Claudia’s Candies over the long-run, thanks to better deals with suppliers. d. Circuit Shack is a well-established business with steady, predictable costs.