If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of
A) sunk costs. B) excess demand for their insurance.
C) correctly pricing their insurance. D) adverse selection.
C
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Economists distinguish between normal and inferior goods using
a. price elasticity of demand b. price elasticity of supply c. income elasticity of demand d. cross-price elasticity of demand e. tax incidence
How much would be added to this year's GDP if you sold your four-year-old automobile for $4,000 and purchased a two-year-old model from an acquaintance for $10,000
a. nothing b. $6,000 c. $10,000 d. $14,000
The "broken window fallacy"
a. explains why inflation is so high. b. is a justification for the government to print more money. c. is illustrated when a government program is justified not on its merits but on the number of jobs it will create. d. has nothing to do with public policy.
The regular pattern of income variation over a person's life is called the