Which is NOT an example of moral hazard

a. people eat more at all-you-can-eat buffets
b. loggers clear-cut a tract of land when paying a fixed fee rather than when paying per tree felled
c. Drivers of heavier, safer cares are more likely to run stop signs
d. workers paid an hourly wage work harder than those on commission

d

Economics

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Johnny has allocated $30 toward coffee and tea and feels that coffee and tea are perfect substitutes. Due to differences in caffeine levels, his MRS of tea for coffee equals 2. If coffee and tea sell for the same price, Johnny will

A) spend all $30 on tea. B) spend all $30 on coffee. C) spend $20 on coffee and $10 on tea. D) be indifferent between any bundle of coffee and tea costing $30.

Economics

With marginal cost pricing

A) marginal benefits are usually less than marginal cost. B) all opportunity costs will be covered in the short run. C) the price charged is equal to the opportunity cost to society of producing one more unit of the good. D) there cannot be any short-run economic profit.

Economics