The short run is that period during which there are no fixed commitments

If Sally drives less carefully after buying auto insurance, she illustrates

A) adverse selection. B) negative selection. C) moral hazard. D) lemon hazard.

Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?

a. The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living. b. The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own. c. Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient. d. There will be no shortages under the first-come first-serve basis of allocation. e. A random process of allocation is fair in the sense that everyone gains and there are no losers.