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Consider a health insurance contract offered to a population of risk averse people. People in the population have different risks for illness and this is known to each person but is unknown to others. Would the market for this health insurance product be prone to adverse selection? Why? What is one solution to the adverse selection problem in this case?
Assume consumer tastes shift toward the consumption of apples. Which of the following statements is an accurate description of the impact of this event on the market for apples.
Suppose that for a firm that digs ditches for laying cable or pipeline, backhoes and backhoe operators are pure complements in production, being used on a one-for-one basis. Draw the isoquants (on a graph with backhoe, “K”, and backhoe operators, “E”..
q1. a television station is considering the sale of promotional dvds. it can have the dvds produced by one of two
What sense is the marketplace cruelly capricious - One of the important things.is to counter the notion that big corporations are faceless machines
the bursting of the housing bubble and the panic of 2008 caused both businesses and households to cut back on their
tax consequences of owning, and determine whether it is better to rent or own. This is an example of the hidden-cost fallacy.
q.the market for water in urban areas in australia is often dominated by one provider for example sydney water in the
q.if the spot rate for japanese yen is 80 yean equals 1 us and the annual interest rate on fixed rate one-year
The president of a growing engineering firm wishes to give each of 20 employees a holiday bonus. How much needs to be deposited each month for a year at a 12% nominal rate, compounded monthly, so that each employee will receive a $2,500 bonus?
The price level in the economy in 2007 and 2008 rose from 100 to 105. In 2008 and 2009, the price level increase from 105 to 110.25. How does the short-run Phillips curve forecast the unemployment rate will change as a result?
q1. individual has a utility function described by the equation u2xv. the price of x is 32 every item whereas the price
What type of compensation policy would you expect to observe in an industry with rapidly changing technology? Explain. Suppose you are the owner-operator of a gas station in a small town. Over the past 20 years, you and your rival successfully kept p..
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