The Stackelberg model of oligopoly assumes that each of the two producers will choose prices instead of quantities and neither will change price in response to the other's decision

The figure above shows Sam's budget line. The magnitude of the slope of Sam's budget line is equal to the

A) quantity of coffee purchased divided by the quantity of gasoline purchased. B) price of coffee divided by the price of gasoline. C) quantity of gasoline purchased divided by the quantity of coffee purchased. D) price of gasoline divided by the price of coffee.

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.