In 1960, national defense comprised about _____ of federal government expenditures. a. one quarter b. one-third c. one half d. two-thirds ANSWER c
Date: September 9th, 2020
Define moral hazard and adverse selection in the context of health insurance markets. Make sure to discuss why they are problems for health insurance markets. What will be an ideal response? ANSWER Moral hazard is when an insured individual has some control over the events that trigger a payment from the insurance company. This […]
Date: September 9th, 2020
On any given day, a salesman can earn $0 with a 20% probability, $100 with a 40% probability, or $300 with a 20% probability. His expected earnings equal A) $0. B) $100 because that is the most likely outcome. C) $100 because that is what he will earn on average. D) $200 because that is […]
Date: September 9th, 2020
Transforming the tax base of an income tax by subtracting savings has the advantage that _____. a. a progressive rate structure can be applied to a consumption tax b. all income can be taxed at a flat rate c. it double taxes income d. it guarantees progressivity ANSWER a
Date: September 9th, 2020
In a world with saving, making an income tax a consumption tax would require the tax base to be _____. a. income b. income minus savings c. consumption plus investment d. comprehensive ANSWER b
Date: September 9th, 2020
Provide three rationales for government involvement in health care markets. Which is the most recent? What will be an ideal response? ANSWER One rationale for government intervention into health care markets is in the area of contagious diseases. Since contagious diseases are a type of externality because one person does not take into account […]
Date: September 9th, 2020
What is the primary prediction of the median voter model? List the two key assumptions of the median voter model regarding the preferences of voters. What will be an ideal response? ANSWER The median voter model examines collective decision-making by majority rule and concludes that a majority rule voting system will select the outcome […]
Date: September 9th, 2020
On any given day, a salesman can earn $0 with a 30% probability, $100 with a 20% probability, or $300 with a 50% probability. His expected earnings equal A) $0. B) $100. C) $150. D) $170. ANSWER D
Date: September 9th, 2020
Why do individuals demand health insurance? Does the health insurance provided through most employers more or less than people would get if purchased on their own? Why What will be an ideal response? ANSWER Individuals primarily demand health insurance to protect themselves against low probability but extremely expensive medical expenses. The type of comprehensive […]
Date: September 9th, 2020
Can the median voter model help explain why third parties have generally not been successful in the United States? Explain why or why not. What will be an ideal response? ANSWER Yes, the median voter can help explain why third parties have generally not been successful in the United States. Under a majority rule […]
Date: September 9th, 2020
