An individual will never buy complete insurance if
a. he or she is risk averse.
b. he or she is a risk taker.
c. insurance premiums are fair.
d. under any circumstances.
b
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Consider a world of two countries facing opportunity costs and producing only wheat and cloth. In one hour, residents of Country A can produce a maximum of either 1 unit of wheat or 0.5 unit of cloth, whereas residents of Country B can produce a maximum
of either 0.3 unit of wheat or 0.4 unit of cloth. Country B should export A) wheat and cloth; country A should not export anything. B) wheat and country A should export cloth. C) nothing and country A should export both wheat and cloth. D) cloth and country A should export wheat.
The residential-electricity market is characterized by
A. unregulated perfect competition. B. unregulated natural monopoly. C. regulated (usually natural) monopoly. D. unregulated simple monopoly.