Malika just got a full-coverage car insurance. Because Malika obtained full-coverage car insurance, Malika will have an incentive to..... because of......

• A) Drive more cautiously than if she didn't have insurance; adverse selection

• B) Drive less cautiously than if she didn't have insurance; moral hazard

• C) Drive more cautiously than if she didn't have insurance; moral hazard

• D) Drive less cautiously than if she didn't have insurance; adverse selection

Which of the following is most likely to be a fixed factor of production at a pizza restaurant?

• A) The amount of electricity

• B) The size of the seating area

• C) The amount of pizza dough

• D) The number of waiters

The main problem with public subsidies is that they:

• A) Lead to a decrease in demand

• B) Are not effective at lowering prices

• C) Lower total economic surplus

• D) Do not help the poor afford essential goods and services

If fast food is an inferior good then

• the demand for fast food will fall as the income rise

• the demand for fast food will fall as the price of fast food rises.

• the demand for fast food will fall as income falls.

• the quantity of fast food demanded will rise as the price of fast food rises.

The benefits to specialization are even greater when two trading partners have

• similar consumption preferences.

• absolute advantages in producing the same goods.

• large differences in opportunity costs.

• very similar opportunity costs.

A firm earns a normal profit when its

• economic profit is zero.

• accounting profit is positive.

• economic profit is positive.

• accounting profit is zero.

Airlines that charge higher prices for customers who purchase their tickets at the last minute are

• perfect price discriminators.

• price discriminating by identifying passengers with higher reservation prices.

• lowering total economie surplus.

• not price discriminating because the cost of the ticket is not the same

A seller's supply curve shows the seller's

• hourly wage for producing an additional unit of output at each quantity

• opportunity cost of producing an additional unit of output at each quantity

• willingness to pay for an additional unit of output at each quantity

• profit from producing an additional unit of output at each quantity

when the price of a good rises, marginal utility per dollar spent on that good...., leading consumers to purchase ... of that good

• falls, more

• falls, less

• rises, more

• rises, less

Diet Coke is a close substitute for Diet Pepsi. When Coca-Cola introduced Diet Coke in 1982, the price elasticity of demand for Diet Pepsi ... and PepsiCo's ability to raise revenues through price increases...

• had no effect, was reduced

• increased, increased

• decreased, was reduced

• increased, was reduced