Author Question: Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's ... (Read 48 times)

HudsonKB16 · **on:** Jun 29, 2018

Employees at Bank of America are good at providing banking services and workers at Ben & Jerry's are good at making ice cream.

If some bankers are moved to making ice cream, we get a small increase in the amount of ice cream produced and a large decrease in the amount of banking services provided. If the PPF has banking services on the vertical axis and ice cream on the horizontal axis, the effect of the change reflects A) decreasing opportunity costs.
B) a bowed out PPF for banking services and ice cream.
C) production efficiency.
D) a shift to a flatter PPF.

Question 2

Insurance is possible and can be profitable because of

A) private information.
B) adverse selection.
C) moral hazard.
D) consumers are risk aversion.