Refer to Figure 7-4. With insurance and a third-party payer system, what is the amount of the deadweight loss?

Suppose one is offered a gamble in which you win $1,000 half the time but lose $1,000 half the time. Since in this case one is as likely to win as to lose the $1,000, the average payoff on this gamble—its expected value—is:

0.5 ? $1,000 + 0.5 ? (-$1,000 ) = 0. Under such circumstances: A) no one will take the gamble. B) risk averse individuals will take the gamble. C) risk lovers individuals will not take the gamble. D) risk neutral individuals will not take the gamble. E) risk lovers and risk neutral individuals may take the gamble.

The meaning of interdependence in a monopolistically competitive market is

A) that it is difficult for firms to get together to collude. B) that products produced by firms will be good substitutes. C) that firms will not take into account the reaction of rival firms. D) that price rigging commonly occurs.