A consequence of adverse selection for the insurance market is that:
A. risk-seeking individuals typically pay higher premiums than risk-averse individuals.
B. everyone ends up paying lower premiums.
C. everyone ends up paying higher premiums.
D. risk-averse individuals typically pay higher premiums than risk-seekers.
Answer: C
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Waldo buys only two items, pretzels and ham sandwiches. Waldo has $24 in income, pretzels cost $0.60 per bag and ham sandwiches cost $2.40 each. Which of the following statements is TRUE for the information given above?
A) Waldo's real income expressed in terms of pretzels is 40 bags of pretzels. B) Waldo's real income expressed in terms of ham sandwiches is 10 ham sandwiches. C) The relative price of a ham sandwich in terms of pretzels is 4 bags of pretzels per ham sandwich. D) All of the above answers are correct.
Subsistence production is
a. produced on the farm for a city market b. produced for export c. produced for sale to neighboring villages d. produced for consumption by the producer e. none of the above.