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.
B
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If there are both external benefits and external costs associated with the production and consumption of a good, and the external benefits are greater than the external costs,
a. Taxing it could bring us closer to the efficient solution b. Subsidizing it could bring us closer to the efficient solution c. Neither a tax or a subsidy could bring us closer to the efficient solution d. None of the above is true.
In a foreign exchange market diagram with dollars per peso on the vertical axis, the quantity of __________ would be on the horizontal axis, and the U.S. demand for Mexican goods would help to determine the __________ curve
A) dollars; demand B) dollars; supply C) pesos; demand D) pesos; supply