Question : 12.4   Chapter Figures The figures show two auto insurance markets, one : 1241110

 

12.4   Chapter Figures

 

The figures show two auto insurance markets, one market for safe drivers and one market for aggressive drivers.

 

1) The market for aggressive drivers is illustrated in ________, and the market for safe drivers is illustrated in ________.

A) Figure A; Figure A also

B) Figure B; Figure A

C) Figure A; Figure B

D) Figure B; Figure B also

E) More information is needed to answer the question.

2) In a pooling equilibrium, aggressive drivers pay a premium of ________ and safe drivers pay a premium of ________.

A) $1,000; $1,000

B) $800; $1,200

C) $1,200; $800

D) $1,000; $800

E) $1,200; $1,000

 

3) In a separating equilibrium, aggressive drivers pay a premium of ________ and safe drivers pay a premium of ________.

A) $1,000; $1,000

B) $800; $1,200

C) $1,200; $800

D) $1,000; $800

E) $1,200; $1,000

 

4) In a pooling equilibrium, there ________ a deadweight loss in the market for safe drivers, and there ________ a deadweight loss in the market for aggressive drivers.

A) is; is

B) is; is not

C) is not; is

D) is not; is not

E) might be; might be

5) In a pooling equilibrium, there is ________ of insurance in the market for safe drivers, and there is ________ of insurance in the market for aggressive drivers.

A) overprovision; underprovision

B) overprovision; overprovision

C) underprovision; underprovision

D) underprovision; overprovision

E) underprovision; an efficient quantity

 

6) In a separating equilibrium, there is ________ of insurance in the market for safe drivers, and there is ________ of insurance in the market for aggressive drivers.

A) overprovision; underprovision

B) overprovision; overprovision

C) underprovision; underprovision

D) underprovision; overprovision

E) an efficient quantity; an efficient quantity

7) The figures show the expenditures per person on health care and the efficiency of the health care system in 8 different nations. The United States is bar ________ in expenditures per person and is bar ________ in efficiency index.

A) A; A

B) B; A

C) A; D

D) E; E

E) D; B

 

 

12.5   Integrative Questions

 

1) Moral hazard typically occurs because

A) people are dishonest.

B) agreements sometimes create incentives that are costly to monitor so people can act in their self-interest.

C) workers possess diminishing marginal productivity.

D) screening leads to informed people revealing their relevant private information.

E) workers possess adverse selection.

2) Moral hazard results from ________ information, and adverse selection results from ________ information.

A) private; private

B) private; public

C) public; private

D) public; public

E) None of the above answers is correct because both are the result of the lemons problem.

 

3) If a salesperson is paid by the volume of sales he or she makes, then the

A) moral hazard problem is diminished.

B) lemons problem can be screened.

C) moral hazard problem is enhanced.

D) adverse selection problem is enhanced.

E) None of the above answers is correct.

 

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more