Linda noticed that ever since her brother bought theft insurance for his car, he keeps forgetting to lock his car. Her brother's behavior is an example of ________.
A) adverse selection
B) moral hazard
C) a positive externality
D) a pecuniary externality
Question 2
Wobet is a small country that produces only steak and potatoes. Steaks have a price of 10 each and potatoes have a price of 1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using ________, Wobet has GDP equal to ________.
A) market value; 30 units
B) a market basket; 30 units
C) market value; 120
D) real value; 120
E) a price index; 120
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