Which of the following entities can diversify risk?
A. Corporations
B. Insurance companies
C. Individuals
D. All of these entities can diversify risk.
Answer: D
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Which of the following is not part of GDP?
A. purchases of new goods by households B. firms buying new machines C. the government buying new schools D. businesses paying bribes to government officials
Russia and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. The two strategies these countries face are to comply with the cartel agreement or to cheat on the cartel agreement
If both countries comply, the economic profit for each will be $140 million. If one country cheats, that country earns $200 million in economic profit and the other country will have an economic loss of $10 million. If all countries cheat, they break even. What is the outcome of this game if it is only played once? A) Each country will comply with the cartel agreement. B) Two countries will comply and one will cheat, but we cannot predict which one will cheat. C) One country will comply and two will cheat, but we cannot predict which ones will cheat. D) None of the countries will comply with the cartel agreement.