Which of the following represent examples of adverse selection?
A) Unhealthy people are more likely to want health insurance.
B) Careless drivers purchasing extra auto insurance.
C) Risk averse individuals choosing to buy extra insurance.
D) all of the above
E) A and B only
E
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If reserves in the banking system increase by $100, then checkable deposits will increase by $2,000 in the simple model of deposit creation when the required reserve ratio is
A) 0.01. B) 0.05. C) 0.10. D) 0.20.
The major determinant of an individual's income is
a. whether or not her family is wealthy. b. how well she gets along with her co-workers and boss. c. how productive she is combined with demand for what she produces. d. how much she enjoys the work.
An upward-sloping line or curve is used to illustrate:
A. a direct relationship. B. an inverse relationship. C. two unrelated variables. D. the ceteris paribus assumption.
We are given the individual demand curves for all of the people that consume ice cream. Which statement is TRUE about the market demand curve for ice cream?
A) The market demand curve is obtained by horizontally summing the individual demand curves. B) The market demand curve is obtained by vertically summing the individual demand curves. C) The market demand curve cannot be obtained because information on prices is missing. D) The market demand curve cannot be obtained from individual demand curves.