The percentage "markdown" due to monopsony power is equal to ________
A) (P - MC)/P
B) 1/ED
C) (MV - P)/P
D) P[1 + (1/ED)]
C
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Charging drivers with good records lower premiums than drivers with bad records is an example of an attempt by insurance companies to deal with the problem of
A) moral hazard. B) adverse selection. C) drunk driving. D) failure of policyholders to keep paying their premiums.
The demand for DVDs increases. As a result
A) the wage rate in the DVD industry increases and the quantity demanded of workers increases. B) the wage rate in the DVD industry increases and the quantity supplied of workers increases. C) the demand for labor increases and the supply of labor also increases, leaving wages unchanged. D) the demand for labor increases, but since the supply curve of labor is perfectly elastic, the wage rate does not change.