During the crisis of 2008 housing prices ________ and stock prices ________. (Fill in the blank)

Suppose your state government could undertake some measures that would improve the safety of highways within the state. If the goal is to use resources efficiently, how many of the measures should be undertaken?

a. all of them b. all measures up to the point at which the marginal social benefit from safety improvements equals the marginal social cost c. all measures for which the marginal social benefits from safety improvements are greater than zero d. all measures for which the marginal social benefit from safety improvements is at least as great as what motorists have reported they would be willing to pay

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured. In other words, the automobile insurance market is subject to

A) moral hazard. B) adverse selection. C) asymmetric information. D) market signaling.