Private insurance companies have been out of the flood insurance business for decades. After their departure the government has gone into the business by granting coverage with below-market premiums
Why might this be in inefficient outcome? Comment on the amount of housing that we should expect to see along our nation's coastlines. Also, discuss the degree of danger that this poses for both property and lives when hurricanes strike.
It encourages people to build or stay in homes in risky low-laying areas. If these homeowners faced the true cost of their decisions there would likely be less build up of residential construction along the coastlines and hurricanes would also be less deadly since fewer people would reside in these areas.
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Bob's Books is the only bookstore in town. The figure above shows the demand curve for books and Bob's Books' marginal revenue curve and marginal cost curve
Bob's Books maximizes its profit and sets the price of a book equal to ________ and has total annual revenue of ________. A) $40; $40,000 B) $30; $60,000 C) $20, $60,000 D) $10; $40,000
All else remaining equal, if the amount of money market deposit accounts increase, this will increase the size of:
a) only M1. b) only M2. c) M1 and M2. d) neither M1 nor M2.