(Consider This) Which of the following statements about insurance and risk is true?
A. Insurance inhibits economic growth and investment by discouraging risk-taking.
B. Insurance transfers risk from those with a high tolerance for risk to those with a low
tolerance for risk.
C. Insurance companies always earn profits because insurance premiums always exceed the
payout for insured events.
D. Insurance transfers risk from those with a low tolerance for risk to those with a higher
tolerance for risk.
Answer: D
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Monopoly powers given to domestic utility companies to create economies-of-scale might unintentionally
A) be an obstacle to increased international trade. B) be useful for the creation of a comparative advantage for the domestic country. C) not be used for rent-seeking behaviors. D) be a positive externality for the world as a whole. E) None of the above.
If the Korean steel industry subsidizes the steel that it sells to the United States, the
a. United States should protect its domestic steel industry from this unfair competition. b. harm done to U.S. steel producers from this unfair competition exceeds the gain to U.S. consumers of cheap Korean steel. c. harm done to U.S. steel producers is less than the benefit that accrues to U.S. consumers of steel. d. United States should subsidize the products it sells to Korea.