Many residents of the city of Adelphia drive without automobile insurance. Assuming that Adelphia is just like any other city and these are risk averse individuals, which of the following is most likely TRUE?
A) Economic models do not work.
B) These people maximize wealth.
C) The price of automobile insurance exceeds their maximum value of insurance.
D) There are no automobile accidents or thefts in the city of Adelphia.
C
You might also like to view...
In the long run, the Phillips curve is a ________ at ________
A) horizontal line; 0% inflation B) vertical line; the natural rate of unemployment C) vertical line; the expected rate of inflation D) negatively sloped line; the intersection of aggregate demand and short-run aggregate supply
Suppose the demand curve is perfectly inelastic and the supply curve is upward sloping. The price sellers receive after a specific tax is imposed on sellers
A) is less than before the tax. B) is higher than before the tax. C) is unchanged. D) depends on the supply elasticity.