If the price of lumber rises, then, in the market for sawdust ...

[chads108]

If the price of lumber rises, then, in the market for sawdust
 
  A) the supply curve of sawdust shifts leftward.
  B) the supply curve of sawdust shifts rightward.
  C) there is a movement downward along the supply curve for sawdust.
  D) there is a movement upward along the supply curve for sawdust.

Question 2

Why do people often tend to take risks if they are insured?
 
  What will be an ideal response?

[javimendoza7]

Answer to Question 1

B

Answer to Question 2

People often tend to take risks if they are insured because they do not have to bear the costs if anything goes wrong. Such behavior is called moral hazard. It happens when one party in a transaction takes actions based on his or her private information that is unavailable to the other party but affects its payoff.

[chads108]

Gracias!

[juliaf]

Thanks for the timely response, appreciate it