The market system is able to allocate resources efficiently because individuals have the right to the output they produce and _____

Medical histories used by insurance firms allow them to

A) identify high-risk people, so they can be denied insurance and premiums kept down for low risk people. B) increase the number of policies issued, raising premiums as a result. C) increase the number of policies issued, lowering premiums as a result. D) lower the number of policies issued, raising premiums. E) increase market power in the insurance industry, raising premiums.

If a sawmill creates too much noise for local residents,

a. noise restrictions will force residents to move out of the area. b. a sense of social responsibility will cause owners of the mill to reduce noise levels. c. the government can raise economic well-being through noise-control regulations. d. the government should avoid intervening because the market will allocate resources efficiently.