When do insurance companies encounter the problem of moral hazard?
a. When simply having insurance causes people to take more risks than they would otherwise.
b. When they do not have enough information to distinguish between people who are "good risks" and those who are "bad risks."
c. When the price of insurance premiums fully reflects all available information.
d. When the insurance company suffers large losses because a major catastrophe has affected a large number of people simultaneously.
a. When simply having insurance causes people to take more risks than they would otherwise.
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Changes in interest rates cause a shift in:
a. the aggregate demand curve b. The aggregate supply curve c. The investment demand curve d. The production possibilities curve
Which of the following statements accurately describes a difference between a firm that is a monopolist and one that is a competitive price taker?
A. Marginal revenue and market price are equal for the competitive price taker but not for the monopolist. B. The monopolist does not always produce the output that equates marginal cost and marginal revenue; the competitive price taker does. C. The monopolist charges the highest price possible; the competitive price taker charges a price equal to its per-unit cost. D. A monopolist can earn economic profit in the short run; a competitive price taker cannot.
A short-run decrease in the price of a firm's output will typically
A. lead to a movement along the firm's demand for labor curve. B. not impact the hiring of labor. C. make the demand for labor more inelastic. D. lead to lower employment of labor in the competitive firm.
Which of the following is a simultaneous decision game?
A) Tic-tac-toe B) Chess C) Poker D) Rock-paper-scissors