According to the life-cycle hypothesis, MPCs will
a. be relatively low for young adults, rise during middle age, and then rise again near or in retirement
b. be relatively high for young adults, fall during middle age, and then rise again near or in retirement
c. be relatively high for young adults, fall during middle age, and then fall again near or in retirement
d. be relatively low for young adults, rise during middle age, and then fall again near or in retirement
e. remain relatively constant over a person's life cycle
B
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The assumption that current-period labor supply is positively related to the current-period real wage is justified as long as the
A) income effect dominates the substitution effect in the short run. B) income effect dominates the substitution effect in the long run. C) substitution effect dominates the income effect in the short run. D) substitution effect dominates the income effect in the long run.
A group of 100 people seek out an insurance company to underwrite health insurance for its members. If expected medical spending for the group is $150,000, what will the average premium be if the health insurance company estimates the premium adding net loading costs of 20 percent?
a. $1,200 b. $1,500 c. $1,800 d. $3,000