The tendency of those who are insured to take more risks as a result is a problem of:
a. free riding
b. moral hazard.
c. adverse selection.
d. positive externalities.
b
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The rutabaga market is perfectly competitive and the price of a ton of rutabagas rises. As a result, Rudy, a rutabaga farmer, will
A) decrease his output of rutabagas. B) not change his output of rutabagas because Rudy's firm is a price taker. C) increase his output of rutabagas. D) at first decrease and then increase his output of rutabagas. E) probably change his output of rutabagas, but more information is needed about the change in the marginal revenue of a ton of rutabagas.
A single seller dominates the market for robotic mowers and charges a price above the competitive price. Some potential consumers do not buy mowers they would have bought at a lower price. What economic condition is represented by this scenario?
a. inventory b. externality c. efficiency d. monopoly
Specialization and exchange
A. creates benefits for both individuals and nations. B. does NOT particularly benefit either individuals or nations. C. can benefit individuals but not nations. D. can benefit nations but not individuals.
Economic growth appears on a production possibilities curve as
A) the curve shifting out away from the origin. B) the curve shifting in toward the origin. C) a change in the slope of the curve. D) the points outside the production possibilities curve.