In the context of insurance, everyone typically has to pay a higher premium because of:
A. risk aversion.
B. adverse selection.
C. diversification.
D. risk pooling.
Answer: B
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Lectures in microeconomics can be delivered either by an instructor (labor) or a movie (capital) or any combination of both. Yet the it gets harder and harder to substitute more movies for an instructor the more movies are already used
Which graph in the above figure best represents the isoquants for lectures in microeconomics when Capital per day is on the vertical axis and Labor per day is on the horizontal axis? A) Graph A B) Graph B C) Graph C D) Graph D
If a monopolist produces beyond the quantity where MC = MR:
A. the increase in revenue exceeds the increase in cost. B. total revenue exceeds total cost. C. the increase in revenue is less than the increase in cost. D. total revenue is less than total cost.
Under a regressive tax system, the marginal tax rate for high income taxpayers is
a. higher than the marginal tax rate for low income taxpayers. b. the same as the marginal tax rate for low income taxpayers. c. lower than the marginal tax rate for low income taxpayers. d. Any of the above could be true under a regressive tax system.
Which of the following pairs of portfolios exemplifies the risk-return tradeoff?
a. For Portfolio A, the average return is 6 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 6 percent and the standard deviation is 25 percent. b. For Portfolio A, the average return is 5 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 15 percent. c. For Portfolio A, the average return is 5 percent and the standard deviation is 25 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 15 percent. d. For Portfolio A, the average return is 5 percent and the standard deviation is 15 percent; for Portfolio B, the average return is 8 percent and the standard deviation is 25 percent.