In the context of insurance, moral hazard refers to:
A. when risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual.
B. the tendency for high-risk individuals to seek out more insurance than low-risk individuals.
C. when people organize themselves in a group to collectively absorb the cost of the risk faced by each individual.
D. the tendency for people to behave in a riskier way after they have acquired insurance.
Answer: D
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For a firm in monopolistic competition, the marginal cost curve intersects the average total cost curve
A) at the minimum average total cost. B) to the left of the minimum average total cost. C) to the right of the minimum average total cost. D) at no point.
Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.