In insurance markets, moral hazard creates economic inefficiency because:
A) insurance companies are price setters rather than price takers.
B) insurance products are not homogenous goods.
C) there are many buyers but only a few sellers.
D) insured individuals do not correctly perceive the costs or benefits of their actions.
D
Economics
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Which of the following occurs if firms are able to restrict output and raise price?
a. resources are misallocated b. wealth is shifted from consumers to government c. wealth is shifted from producers to consumers d. P = MC e. P = minimum LRAC
Economics
Under a _____ structure, the marginal income tax rate rises and the average tax rate decreases as personal income falls
a. value added tax b. sin tax c. progressive tax d. regressive tax e. lumpsum tax
Economics