"An increase in the price of oranges will increase the demand for grapefruits." This statement is an example of a normative economic statement

People often complain bitterly when they learn that CEOs of non-profit companies like the United Way or the Red Cross earn salaries commensurate to what could be earned in by CEOs employed by for-profit companies? Is this complaint valid? Explain

What will be an ideal response?

You offer an extended warranty for your product that is purchased by a few customers. If the product typically fails 2% of the time, the claim rate will exceed 2% of warranty purchasers because

a. adverse selection will lead those who are more reckless to purchase the warranty b. moral hazard will lead those who purchase to be more reckless c. you systematically underestimate product failure rates d. Both A&B