A) occurs when incentives are distorted because an individual knows more about his or her own actions than other people do. B) is a term used to describe the bonuses paid for particularly hazardous jobs (such as firefighting). C) is a term used synonymously with value judgement. D) refers to the questionable morality of price gouging in hazardous times (e.g. ,in the presence of famines or floods). A) occurs when incentives are distorted because an individual knows more about his or her own actions than other people do. B) is a term used to describe the bonuses paid for particularly hazardous jobs (such as firefighting). C) is a term used synonymously with value judgement. D) refers to the questionable morality of price gouging in hazardous times (e.g. ,in the presence of famines or floods).

Exam 20: Uncertainty, risk, and Private Information

If the probability that one person will develop a health problem is greater than that of another person and if they buy insurance from the same provider,the person with a higher probability will MOST likely pay:

(Multiple Choice)

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Question 121

Companies offering life insurance often require a drug test to determine whether the buyer is a smoker.A smoker must pay a higher premium.This is an example of:

(Multiple Choice)

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Question 122

The marginal utility of income for a risk-averse individual will be:

(Multiple Choice)

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Question 123

The premium on insurance is often _ to the deductible,allowing insurance companies to _ their customers.

(Multiple Choice)

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Question 124

Insurance companies attempt to minimize moral hazard by imposing:

(Multiple Choice)

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Question 125

Toyotas are known for their quality and durability.As a result,compared with other used-car markets,adverse selection in the used-Toyota market is:

(Multiple Choice)

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Question 126

We would consider a tornado and a CEO scandal that hit a construction company on the same day as _____ events.

(Multiple Choice)

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Question 127

A life insurance company will often require an applicant to submit to a brief physical exam to assess that person's basic level of health.This practice is a form of _ to lessen the problem of _.

(Multiple Choice)

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Question 128

Use the following to answer questions : Scenario: Health Costs Alan is hoping for a healthy year,meaning that he would have zero health costs.Given his habits,there is a 40% chance that Alan will develop a health issue resulting in $50 000 in health costs.Assume these are the only two conditions that could exist for Alan in the coming year. -(Scenario: Health Costs)Use Scenario: Health Costs.Given the fact that Alan has a 40% chance of developing a health problem,what is the expected value of Alan's health care costs for the coming year?

(Multiple Choice)

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Question 129

The opportunity to engage in pooling shifts the ___ curve of insurance to the right;insurance companies will take on _ risk and charge a ___ premium than without pooling.

(Multiple Choice)

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Question 130

As the premium for an insurance policy falls,there is an increase in the _____ insurance.

(Multiple Choice)

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Question 131

The Conduire family owns three cars and is considering buying insurance to cover the cost of repairs.They face two possible states: state 1,in which their cars need no repairs and their income available for purchasing other goods and services is equal to $50 000;and state 2,in which their cars need $10 000 worth of repairs and their income available for purchasing other goods and services is reduced to $40 000.The probability of occurrence is 0.5 for each state.They can buy insurance that will cover the full cost of repairs for $5 000.If the Conduires are risk-averse and maximize their expected utility,they will:

(Multiple Choice)

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Question 132

The total amount of funds that potentially could be paid out by an insurance company is the:

(Multiple Choice)

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Question 133

Fire insurance policies include deductibles:

(Multiple Choice)

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Question 134

Moral hazard:

(Multiple Choice)

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Question 135

Use the following to answer questions : Scenario: Flood Area Suppose that you own a home that is estimated to be worth $250 000.You live in a flood plain;as a result,the probability that you will lose your home to a flood is 30%. -In a particular insurance market,there is a decrease in the degree of risk aversion among suppliers.Holding everything else constant,the equilibrium premium will _ and the equilibrium quantity of insurance will _.

(Multiple Choice)

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Question 136

The easiest risks to reduce by diversification are those associated with positively correlated events.

(True/False)

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Question 137

Suppose that the probability of a major theft at a hotel is 1%,while the probability of an earthquake hitting the hotel is 2.3%.The probability that both would occur on the same day is therefore:

(Multiple Choice)

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Question 138

Moral hazard occurs when individuals:

(Multiple Choice)

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Question 139

If a stock analyst believes there is a 10% probability that the stock price of Dymonatis will be $30 at the end of the year,a 50% probability that it will be $40,and a 40% probability that it will be $50,then the expected value of the stock at the end of the year is:

(Multiple Choice)

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Question 140

Showing 121 - 140 of 150

If the probability that one person will develop a health problem is greater than that of another person and if they buy insurance from the same provider,the person with a higher probability will MOST likely pay:

Companies offering life insurance often require a drug test to determine whether the buyer is a smoker.A smoker must pay a higher premium.This is an example of:

The marginal utility of income for a risk-averse individual will be:

The premium on insurance is often _ to the deductible,allowing insurance companies to _ their customers.

Insurance companies attempt to minimize moral hazard by imposing:

Toyotas are known for their quality and durability.As a result,compared with other used-car markets,adverse selection in the used-Toyota market is:

We would consider a tornado and a CEO scandal that hit a construction company on the same day as _____ events.

A life insurance company will often require an applicant to submit to a brief physical exam to assess that person's basic level of health.This practice is a form of _ to lessen the problem of _.

The opportunity to engage in pooling shifts the ___ curve of insurance to the right;insurance companies will take on _ risk and charge a ___ premium than without pooling.

As the premium for an insurance policy falls,there is an increase in the _____ insurance.

The total amount of funds that potentially could be paid out by an insurance company is the:

Fire insurance policies include deductibles:

Moral hazard:

The easiest risks to reduce by diversification are those associated with positively correlated events.

Suppose that the probability of a major theft at a hotel is 1%,while the probability of an earthquake hitting the hotel is 2.3%.The probability that both would occur on the same day is therefore:

Moral hazard occurs when individuals:

If a stock analyst believes there is a 10% probability that the stock price of Dymonatis will be $30 at the end of the year,a 50% probability that it will be $40,and a 40% probability that it will be $50,then the expected value of the stock at the end of the year is:

First Principles

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

Exam 20: Uncertainty, risk, and Private Information

If the probability that one person will develop a health problem is greater than that of another person and if they buy insurance from the same provider,the person with a higher probability will MOST likely pay:

Companies offering life insurance often require a drug test to determine whether the buyer is a smoker.A smoker must pay a higher premium.This is an example of:

The marginal utility of income for a risk-averse individual will be:

The premium on insurance is often _____ to the deductible,allowing insurance companies to _____ their customers.

Insurance companies attempt to minimize moral hazard by imposing:

Toyotas are known for their quality and durability.As a result,compared with other used-car markets,adverse selection in the used-Toyota market is:

We would consider a tornado and a CEO scandal that hit a construction company on the same day as _____ events.

A life insurance company will often require an applicant to submit to a brief physical exam to assess that person's basic level of health.This practice is a form of _____ to lessen the problem of _____.

The opportunity to engage in pooling shifts the _____ curve of insurance to the right;insurance companies will take on _____ risk and charge a _____ premium than without pooling.

As the premium for an insurance policy falls,there is an increase in the _____ insurance.

The total amount of funds that potentially could be paid out by an insurance company is the:

Fire insurance policies include deductibles:

Moral hazard:

The easiest risks to reduce by diversification are those associated with positively correlated events.

Suppose that the probability of a major theft at a hotel is 1%,while the probability of an earthquake hitting the hotel is 2.3%.The probability that both would occur on the same day is therefore:

Moral hazard occurs when individuals:

If a stock analyst believes there is a 10% probability that the stock price of Dymonatis will be $30 at the end of the year,a 50% probability that it will be $40,and a 40% probability that it will be $50,then the expected value of the stock at the end of the year is:

First Principles

Economic Models

Supply and Demand

Consumer and Producer Surplus

Price Controls and Quotas

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve- Inputs and Costs

Perfect Competition and the Supply Curve

Monopoly

Oligopoly

Monopolistic Competition

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Graphs in Economics

Consumer Preferences

Indifference Curve Analysis

Filters

The premium on insurance is often _ to the deductible,allowing insurance companies to _ their customers.

A life insurance company will often require an applicant to submit to a brief physical exam to assess that person's basic level of health.This practice is a form of _ to lessen the problem of _.

The opportunity to engage in pooling shifts the ___ curve of insurance to the right;insurance companies will take on _ risk and charge a ___ premium than without pooling.