Which of the following would be an example of a moral hazard problem?
A. A person in poor health who purchases life insurance
B. A person who is taxed on the purchase of a carton of cigarettes
C. A person who purchases auto insurance and then drives more recklessly
D. A person who receives a subsidy from the Federal government to insulate a home
C. A person who purchases auto insurance and then drives more recklessly
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Which of the following statements is not correct?
a. An advantage of the Earned Income Tax Credit (EITC) is that it targets the working poor better than the minimum wage because it does not benefit teenagers from middle-class families who work summer jobs at the minimum wage. b. A disadvantage of in-kind transfer programs such as food stamps is that they force recipients to purchase from a restricted set of items which may not include things that the poor need the most such as diapers or cleaning supplies. c. A disadvantage of minimum wage laws is that they are expensive for state and local governments to fund. d. Effective minimum wage laws create a surplus of labor.
Recall the Application about craft beer and the increase in the price of hops to answer the following question(s).According to this Application, between 2012 and 2017, the increase in craft beer production increased the price of hops:
A. by about 118 percent. B. by about 87 percent. C. by about 18 percent. D. by about 78 percent
To look at the health of the economy, economists would most probably look at indictors such as:
A) nominal GDP, level of investment and, the general price level. B) level of saving, nominal GDP and, the inflation rate. C) the general price level, employment rate and, level of saving. D) real GDP, unemployment rate and, the inflation rate.
When regulating a natural monopoly, government officials
a. can set an efficient price, but the firm will suffer a loss b. can arrange a Pareto improvement by leaving the firm alone c. should force the firm to set a price equal to minimum marginal cost d. should force the firm to set a price equal to minimum long-run average total cost e. will increase efficiency if they force the firm to produce where MR = MC.