The International Maritime Bureau said the waters off Somalia are the world's most dangerous, accounting for nearly a third reported pirate attacks worldwide. Suppose all boats are insured to $100,000 and pay a premium of $10,000 each
Suppose 10 out of 100 boats are attacked by pirates and these 10 file claims with their insurance. If the insurance company's only costs are the claims it must pay, has the insurance company earned an economic profit? A) Yes, they earned an economic profit of $90,000.
B) No, they broke even.
C) No, they sustained an economic loss of $90,000.
D) Yes, they earned an economic profit of $1,000,000.
B
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If the government drafts people into the armed forces rather than persuading them to volunteer
A) it conceals in part the cost to its citizens of obtaining military personnel. B) it employs a nondiscriminatory system because everyone drafted incurs the same cost and can be paid the same wage. C) it must pay higher wages since many people resent the draft. D) it reduces the cost to the nation as a whole of obtaining military personnel. E) it tends to obtain people with the lowest opportunity costs.
If Dawson prefers pizza to hamburgers and hamburgers to hot dogs, then if preferences are transitive
A) she must prefer pizza to hot dogs. B) she could prefer hamburgers to pizza on some occasions but not hot dogs to pizza. C) she could prefer hot dogs to pizza on some occasions but not hamburgers to hot dogs. D) at times she could be indifferent among the three items.