Refer to Scenario 17.4. If the flood control system were not in place, the insurer would not be willing to insure against the flood for any premium less than
A) $5,000.
B) $10,000.
C) $100,000.
D) $200,000.
E) $1,000,000.
B
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In which of the following situations will the profit of a perfectly competitive firm always increase with an increases in its output?
a. When price is greater than marginal revenue b. When price is less than marginal revenue c. When price is greater than marginal cost d. When price is less than marginal cost e. When price is equal to marginal cost
Peter was recently hired as a salesman for a national consulting firm. His job involves spending a significant portion of his time out of the office visiting prospects and attending conferences. Which of the following is a strategy the consulting firm may employ to discourage Peter from shirking his responsibilities?
a. Tell Peter that the shareholders want to earn a large profit this year. b. Pay Peter commissions on what he sells after the work has been completed. c. Allow Peter to set his own schedule and work from home frequently. d. Pay Peter a lower wage than he would earn in a similar job at another firm.