Financial intermediaries are specialists in the production of
A) market failure.
B) information.
C) traded assets.
D) commercial paper.
B
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Economic profit is ________
A) included in the firm's total opportunity cost B) equal to normal profit minus total opportunity cost C) equal to total revenue minus marginal cost D) equal to total revenue minus total opportunity cost
Ashton has the utility of wealth curve shown in the above figure. Ashton owns a sports car worth $30,000, and that is his only wealth. Ashton is a careless driver and there is a 30 percent chance that he will have an accident within a year
If he does have an accident, his car is worthless. Suppose all sports cars owners are like Ashton. An insurance company agrees to pay each person who has an accident the full value of their car. The company's operating expenses are $1,000. What is the minimum insurance premium that the company is willing to accept? A) $3,000 per year B) $6,000 per year C) $10,000 per year D) $15,000 per year