Suppose health-care reform Y makes it unlawful for insurance companies to deny insurance to persons with a preexisting disease and sets a fine for those people who do not buy insurance. It follows that if the fine is
A) larger than the benefits derived from not buying insurance right away, then people will not buy the insurance and pay the fine.
B) smaller than the benefits derived from not buying the insurance right away, then people will not buy the insurance and pay the fine.
C) larger than the benefits derived from not buying insurance right away, then people will buy the insurance right away and not pay the fine.
D) b and c
E) none of the above
B
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Which of the following is NOT a role of Adam Smith?
A. wrote Wealth of Nations book in 1776 B. believes that prices, self interest, and competition have a role in the economy C. believes in the efficiency of market economies D. argued for laissez faire E. focused on an accumulation of gold
The short-run average total cost (ATC) curve of a firm will tend to be U-shaped because
a. larger firms always have lower per-unit costs than smaller firms. b. at small output rates, average fixed costs (AFC) will be high, while at large output rates, marginal cost (MC) will be high. c. diminishing returns will be present when output is small, while high AFC will push average total cost to high levels when output is large. d. diseconomies of scale will be present at both small and large output rates.