Question 1

Identify and briefly describe two examples of government run insurance programs.

Accepted Answer

• Unemployment insurance: Workers in eve

Question 2

A ____________________ is a promise that the buyer's money will be refunded under certain conditions.

Accepted Answer

A)  money-back guarantee 
B)  warranty 
C)  service contract 
D)  insurance policy 
A)  money-back guarantee 
B)  warranty 
C)  service contract 
D)  insurance policy

Question 3

If buyers become reluctant to purchase high-quality goods because they can't be confident of purchasing a high-quality product, then

Accepted Answer

A)  a large number of buyers will communicate the need for lower prices. 
B)  a large number of sellers will communicate their intention to raise prices. 
C)  a large number of buyers and sellers will be willing to barter to agree on price. 
D)  the equilibrium price and quantity will be adversely affected by a thin market. 
A)  a large number of buyers will communicate the need for lower prices. 
B)  a large number of sellers will communicate their intention to raise prices. 
C)  a large number of buyers and sellers will be willing to barter to agree on price. 
D)  the equilibrium price and quantity will be adversely affected by a thin market.

Question 4

Government regulations allow a manufacturer of natural weight loss products to advertise

Accepted Answer

A)  using any amount of exaggerated claims because, in a free market, caveat emptor prevails. 
B)  using a certain amount of exaggeration about the general delight of using those products. 
C)  any benefits of using their products, even if those benefits are exaggerated. 
D)  about factual benefits only, because exaggerations of any sort are strictly prohibited. 
A)  using any amount of exaggerated claims because, in a free market, caveat emptor prevails. 
B)  using a certain amount of exaggeration about the general delight of using those products. 
C)  any benefits of using their products, even if those benefits are exaggerated. 
D)  about factual benefits only, because exaggerations of any sort are strictly prohibited.

Question 5

Although they have never been charged with a DUI, Glen and Dale often drive while intoxicated and each made 3 claims for auto accidents in 2010. If Crown Insurance decides to raise the price of insurance coverage for all its policy holders to $3,000 per year to off-set the claims of this type of driver, then its attempt to counter

Accepted Answer

A)  the moral hazard problem will be satisfactorily addressed. 
B)  adverse selection will cause the low-risk policy holders to cancel their policies. 
C)  the moral hazard problem will cause the high-risk group to cancel their policies. 
D)  the adverse selection will be satisfactorily addressed. 
A)  the moral hazard problem will be satisfactorily addressed. 
B)  adverse selection will cause the low-risk policy holders to cancel their policies. 
C)  the moral hazard problem will cause the high-risk group to cancel their policies. 
D)  the adverse selection will be satisfactorily addressed.

Question 6

Briefly describe what an occupational license is and provide two examples of occupations where they are used.

Accepted Answer

An occupational license is a form of lic

Question 7

Most buyers face a situation of _____________________ when they invest in the stock market.

Accepted Answer

A)  adverse information 
B)  imperfect information 
C)  imperfect selection 
D)  adverse selection 
A)  adverse information 
B)  imperfect information 
C)  imperfect selection 
D)  adverse selection

Question 8

An insurance policyholder must pay a _______________ for each ______________ service, before insurance covers the rest.

Accepted Answer

A)  copayment; uninsured 
B)  deductible; uninsured 
C)  deductible premium; insured 
D)  copayment; insured 
A)  copayment; uninsured 
B)  deductible; uninsured 
C)  deductible premium; insured 
D)  copayment; insured

Question 9

Which of the following sets the United States apart from every other high-income country in the world?

Accepted Answer

A)  health care insurance is paid for from income tax revenues and provided by a public institution 
B)  most homeowners insurance is paid for by an individual and is provided by for-profit private firms 
C)  most health insurance is paid for by an individual and is provided by for-profit private firms 
D)  automobile insurance premiums are paid to and benefits are provided by a public institution 
A)  health care insurance is paid for from income tax revenues and provided by a public institution 
B)  most homeowners insurance is paid for by an individual and is provided by for-profit private firms 
C)  most health insurance is paid for by an individual and is provided by for-profit private firms 
D)  automobile insurance premiums are paid to and benefits are provided by a public institution

Question 10

The problem of _________________ arises when an antique dealer knows more about the quality of an item than the potential buyer, and as a result the buyer with less knowledge must worry about ending up at a ________________.

Accepted Answer

A)  imperfect selection; lemon 
B)  adverse information; lemon 
C)  adverse selection; disadvantage 
D)  imperfect information; disadvantage 
A)  imperfect selection; lemon 
B)  adverse information; lemon 
C)  adverse selection; disadvantage 
D)  imperfect information; disadvantage

Question 11

State insurance regulators typically attempt to accomplish two things: _______________________and __________________________________ .

Accepted Answer

A)  ensure profitable economic transactions; regulate compulsory insurance 
B)  keep the price of insurance low; make sure that everyone has insurance 
C)  pass laws; ensure individuals cannot be compelled to purchase insurance 
D)  enact a variety of laws; ensure individuals are required to buy insurance 
A)  ensure profitable economic transactions; regulate compulsory insurance 
B)  keep the price of insurance low; make sure that everyone has insurance 
C)  pass laws; ensure individuals cannot be compelled to purchase insurance 
D)  enact a variety of laws; ensure individuals are required to buy insurance

Question 12

How many Americans are thought to be without health insurance because they either work for small companies or at low-paying jobs?

Accepted Answer

A)  20 million 
B)  40 million 
C)  50 million 
D)  70 million 
A)  20 million 
B)  40 million 
C)  50 million 
D)  70 million

Question 13

The major problems caused by imperfect information in insurance markets are

Accepted Answer

A)  moral hazard and adverse selection. 
B)  deceptive applicants and fraudulent claims. 
C)  ability to attract repeat customers and risk groups. 
D)  major additional costs and separating insurance buyers. 
A)  moral hazard and adverse selection. 
B)  deceptive applicants and fraudulent claims. 
C)  ability to attract repeat customers and risk groups. 
D)  major additional costs and separating insurance buyers.

Question 14

Another person or firm who legally pledges to repay some or all of the money loaned if the original borrower fails to do so is called a __________________________ .

Accepted Answer

A)  warrantor 
B)  cosigner 
C)  guaranty 
D)  codebtor 
A)  warrantor 
B)  cosigner 
C)  guaranty 
D)  codebtor

Question 15

Payments made to an insurance company in return for a policy of insurance are called _________________ .

Accepted Answer

A)  risk expenses 
B)  premiums 
C)  risk expenditures 
D)  deductibles 
A)  risk expenses 
B)  premiums 
C)  risk expenditures 
D)  deductibles

Question 16

___________ requires an insurance policyholder to pay a percentage of a loss, and the insurance company pays the remaining cost.

Accepted Answer

A)  Insurance 
B)  Coinsurance 
C)  An insurance policy 
D)  Government regulation 
A)  Insurance 
B)  Coinsurance 
C)  An insurance policy 
D)  Government regulation

Question 17

Briefly explain what is meant by a "thin market" and a "thick market." Include a brief description of how a "thin market" comes about.

Accepted Answer

A market with few buyers and few sellers

Question 18

If U.S. auto manufacturers cut the prices of their vehicles to sell a greater quantity, buyers may assume that the lower price implies _____________ compared to foreign manufactured vehicles.

Accepted Answer

A)  a lower quality 
B)  larger quantities were produced 
C)  higher quality service contracts 
D)  better warranties 
A)  a lower quality 
B)  larger quantities were produced 
C)  higher quality service contracts 
D)  better warranties

Question 19

_____________________ that are issued by government agencies are a form of validation that a worker has completed a certain type of education or passed a certain test.

Accepted Answer

A)  Occupational licenses 
B)  Industrial licenses 
C)  Service contract licenses 
D)  Occupational insurance licenses 
A)  Occupational licenses 
B)  Industrial licenses 
C)  Service contract licenses 
D)  Occupational insurance licenses

Question 20

Individuals who have a small amount deducted from their paychecks to contribute into a pooled fund used to pay benefits for a period of time if they are laid-off have contributed to

Accepted Answer

A)  a pension insurance fund. 
B)  a deposit insurance fund. 
C)  an unemployment insurance fund. 
D)  a healthcare insurance fund. 
A)  a pension insurance fund. 
B)  a deposit insurance fund. 
C)  an unemployment insurance fund. 
D)  a healthcare insurance fund.

Identify and briefly describe two examples of government run insurance programs.

A ____________________ is a promise that the buyer's money will be refunded under certain conditions.

If buyers become reluctant to purchase high-quality goods because they can't be confident of purchasing a high-quality product, then

Government regulations allow a manufacturer of natural weight loss products to advertise

Briefly describe what an occupational license is and provide two examples of occupations where they are used.

Most buyers face a situation of _____________________ when they invest in the stock market.

An insurance policyholder must pay a _ for each service, before insurance covers the rest.

Which of the following sets the United States apart from every other high-income country in the world?

The problem of _ arises when an antique dealer knows more about the quality of an item than the potential buyer, and as a result the buyer with less knowledge must worry about ending up at a .

State insurance regulators typically attempt to accomplish two things: _and ____________ .

How many Americans are thought to be without health insurance because they either work for small companies or at low-paying jobs?

The major problems caused by imperfect information in insurance markets are

Another person or firm who legally pledges to repay some or all of the money loaned if the original borrower fails to do so is called a __________________________ .

Payments made to an insurance company in return for a policy of insurance are called _________________ .

___________ requires an insurance policyholder to pay a percentage of a loss, and the insurance company pays the remaining cost.

Briefly explain what is meant by a "thin market" and a "thick market." Include a brief description of how a "thin market" comes about.

If U.S. auto manufacturers cut the prices of their vehicles to sell a greater quantity, buyers may assume that the lower price implies _____________ compared to foreign manufactured vehicles.

_____________________ that are issued by government agencies are a form of validation that a worker has completed a certain type of education or passed a certain test.

Individuals who have a small amount deducted from their paychecks to contribute into a pooled fund used to pay benefits for a period of time if they are laid-off have contributed to

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Exam 16: Information, Risk, and Insurance

Identify and briefly describe two examples of government run insurance programs.

A ____________________ is a promise that the buyer's money will be refunded under certain conditions.

If buyers become reluctant to purchase high-quality goods because they can't be confident of purchasing a high-quality product, then

Government regulations allow a manufacturer of natural weight loss products to advertise

Briefly describe what an occupational license is and provide two examples of occupations where they are used.

Most buyers face a situation of _____________________ when they invest in the stock market.

An insurance policyholder must pay a _______________ for each ______________ service, before insurance covers the rest.

Which of the following sets the United States apart from every other high-income country in the world?

The problem of _________________ arises when an antique dealer knows more about the quality of an item than the potential buyer, and as a result the buyer with less knowledge must worry about ending up at a ________________.

State insurance regulators typically attempt to accomplish two things: _______________________and __________________________________ .

How many Americans are thought to be without health insurance because they either work for small companies or at low-paying jobs?

The major problems caused by imperfect information in insurance markets are

Another person or firm who legally pledges to repay some or all of the money loaned if the original borrower fails to do so is called a __________________________ .

Payments made to an insurance company in return for a policy of insurance are called _________________ .

___________ requires an insurance policyholder to pay a percentage of a loss, and the insurance company pays the remaining cost.

Briefly explain what is meant by a "thin market" and a "thick market." Include a brief description of how a "thin market" comes about.

If U.S. auto manufacturers cut the prices of their vehicles to sell a greater quantity, buyers may assume that the lower price implies _____________ compared to foreign manufactured vehicles.

_____________________ that are issued by government agencies are a form of validation that a worker has completed a certain type of education or passed a certain test.

Individuals who have a small amount deducted from their paychecks to contribute into a pooled fund used to pay benefits for a period of time if they are laid-off have contributed to

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Cost and Industry Structure

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

An insurance policyholder must pay a _ for each service, before insurance covers the rest.

The problem of _ arises when an antique dealer knows more about the quality of an item than the potential buyer, and as a result the buyer with less knowledge must worry about ending up at a .

State insurance regulators typically attempt to accomplish two things: _and ____________ .