If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of:
A. the free-rider problem.
B. the moral hazard problem.
C. the adverse selection problem.
D. the Coase theorem.
Answer: B
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For a monopolist, on the inelastic range of its demand
A) marginal revenue is negative. B) marginal revenue is positive. C) marginal revenue is equal to zero. D) total revenue is maximized.
La Super Rica is a taco stand in Santa Barbara, California. It is popular with the locals and even the late Julia Child found the food delicious
If La Super Rica is currently producing where marginal revenue is greater than marginal cost, to increase its profit La Super Rica should A) increase production. B) decrease production. C) not change its production because it is maximizing its profit. D) Not enough information is given to determine what La Super Rica should do.