This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A person starting to drive more recklessly after signing a contract with an automobile insurance ... (Read 71 times)

sarasara

  • Hero Member
  • *****
  • Posts: 521
on: Jul 1, 2018
A person starting to drive more recklessly after signing a contract with an automobile insurance company is an example of
 
  A) adverse selection.
  B) moral hazard.
  C) signaling.
  D) screening.

Question 2

Suppose a firm has the following total cost function: TC = 100 + 4q2. What is the minimum price necessary for the firm to earn profit? Below what price will the firm shut down in the short run?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

yahahah24021

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

AC = 100/q + 4q. This is minimized when dAC/dq = 0, or -100/q2 + 4 = 0. Solving yields q = 5 and AC = 40. Thus a price greater than 40 is required for the firm to earn profit. AVC = 4q and MC = 8q. Since AVC is below MC for all levels of output, AVC will be less than price for all levels of output. The firm will not shut down in the short run.


sarasara

  • Member
  • Posts: 521
Reply 2 on: Jul 1, 2018
:D TYSM

flexer1n1

  • Member
  • Posts: 373
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

There are more nerve cells in one human brain than there are stars in the Milky Way.

Did you know?

All adverse reactions are commonly charted in red ink in the patient's record and usually are noted on the front of the chart. Failure to follow correct documentation procedures may result in malpractice lawsuits.

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Assessing a person's spiritual and religious beliefs is an imiportant aspect of nursing care Assessing a person's spiritual and religious beliefs is an imiportant aspect of nursing care
A person with a defective "P" gene might only have it effect the Hair A person with a defective "P" gene might only have it effect the Hair
Sample of an insurance card. Sample of an insurance card.
Finish with effleurage and passive touch. Apply effleurage to both sides simultaneously, starting at ... Finish with effleurage and passive touch. Apply effleurage to both sides simultaneously, starting at ...
How to boost Sex drive How to boost Sex drive
(left) Urine sample from an unaffected person does not change color upon exposure to air. (right) Ur (left) Urine sample from an unaffected person does not change color upon exposure to air. (right) Ur
Video: Peptide Bond Formation Animation

For a complete list of videos, visit our video library