After Hurricane Katrina, there was considerable public outrage that many of the properties were not insured against flooding although they were insured against wind damage. What might explain these different approaches to insurance?
A) The risk of wind damage is potentially diversifiable, but the risk of flooding is not.
B) The risk of flood damage is potentially diversifiable, but the risk of wind damage is not.
C) predatory insurance policies
D) Neither the risk of wind damage nor the risk of flooding is diversifiable.
A
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Is the equilibrium efficient?
a. Yes, since they are both maximizing the utility b. No, since they could both get more utility c. One should keep the house clean d. None of the above
Which of the following statements is FALSE?
A) Included in the firm's short-run production function are both fixed and variable inputs. B) An efficient firm can obtain more output than the production function shows. C) The production function shows the technical relationship between a firm's inputs and outputs. D) The production function presents the technically efficient methods of combining inputs to produce output.