Author Question: Suppose MRS does not equal MRT for all consumers. In this case, the economic outcome is not fully ... (Read 45 times)

burchfield96 · **on:** Jul 1, 2018

Suppose MRS does not equal MRT for all consumers. In this case, the economic outcome is not fully efficient because:

A) exchange is inefficient.
B) the use of inputs in production is inefficient.
C) the mix of outputs in inefficient.
D) none of the above

Question 2

Julia is a 28-year-old nonsmoking, non-drinking female of normal weight. Because of adverse selection in health insurance,

A) She will be charged less for her premiums than people who are higher risks.
B) She is less likely to buy health insurance than the average person, because policy premiums are based on expected medical expenditures of people who are less healthy than she is.
C) When she get health insurance, she will be less likely to take care of herself.
D) She must get health insurance early in life, and is likely to lose health insurance if she smokes, drinks to excess, or gains weight.
E) She is more likely than the average person to buy health insurance, because she is more likely to be offered it.