Continuing with the same family from the preceding question, suppose a risk neutral insurance company exists to provide vacation insurance. Suppose further that each vacation day requires a constant expenditure, and this expenditure is standard across everybody. This allows us to simplify the problem by considering all payments to be in terms of vacation days. What is the least the insurance
company would charge (in terms of vacation days)?
a. 1
b. 2
c. 3
d. 4
b
Economics
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The horizontal axis of the aggregate demand and aggregate supply graph has the
a) the price level as measured by the CPI. b) unemployment rate. c) the price level as measured by the GDP deflator. d) output of goods and services.
Economics
Suppose the market in Figure 9.4 is currently in equilibrium. If the government establishes a price floor of $40, consumer surplus will
A) fall by $50. B) fall by $350. C) remain the same. D) rise by $50. E) rise by $350.
Economics