The above figure shows the payoff to two gasoline stations, A and B, deciding to operate in an isolated town. Suppose a $60 fee is required to enter the market. If firm A chooses its strategy first, then

When the natural unemployment rate increases,

A) both the long-run Phillips curve and the short-run Phillips curve shift leftward. B) there are no shifts of either the long-run Phillips curve or the short-run Phillips curve. C) both the long-run Phillips curve and the short-run Phillips curve shift rightward. D) the long-run Phillips curve shifts leftward, and the short-run Phillips curve shifts rightward. E) the long-run Phillips curve shifts rightward, and the short-run Phillips curve shifts leftward.

The reason that this scenario perfectly illustrates the problem of "moral hazard" in particular is that

Suppose that engineers designed a revolutionary american football helmet that greatly increased the amount of protection for players' heads. Unfortunately however, after the new helmets were introduced, there was an INCREASE in head injuries! This happened because players started taking greater risks on the field due to the belief that the new helmets would protect them. A. A change in policy (i.e., the helmets) led to more risky behavior after the new policy was introduced. B. Football players are usually "risk seeking" individuals by nature. C. There was no conceivable way for the engineers to (scientifically) demonstrate that the new helmets were safer than the old ones. D. All of the above