US21L1

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    Farmers might face a wet spring or a dry spring. If farmers do not have any idea of the likelihood of the spring weather, they face _________________.

    a utility
    a hazard
    a risk
    an uncertainty

  • 2

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    A situation where more than one event might occur, and the probability of each event can be estimated is known as _____________.

    a statistic
    an uncertainty
    a hazard
    a risk

  • 3

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    Rick's attitude to risk is measured by using his ___________________.

    utility of income schedule and curve
    utility curve
    tendency to buy lottery tickets
    utility of wealth schedule and curve

  • 4

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    Expected utility is the _______ from all possible outcomes.

    total utility
    diminishing marginal utility
    average utility
    marginal utility

  • 5

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    Data on the prices, quantities, and qualities of goods and services, and resources is _______.

    government statistics
    economic statistics
    national accounts economic information
    economic information

  • 6

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    The opportunity cost of economic information is _____________.

    marginal information cost
    marginal economic cost
    information cost
    economic cost

  • 7

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    The reservation price is the _______________.

    lowest price that a seller will accept for a good
    price paid when a buyer orders ahead of the purchase date
    price at which marginal benefit of search is just greater than marginal cost.
    highest price that a buyer is willing to pay for a good

  • 8

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    Private information is information that is available to _________________.

    the CIA and is destroyed after 7 years
    the FBI and is destroyed after 7 years
    one person but is too costly for anyone else to obtain
    the individual and the IRS only

  • 9

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    Molly owns a CD player and she insures the CD player against theft. As a result, Molly now spends less on home security devices. Molly's behavior is an example of _______________.

    private information hazard
    adverse selection
    moral hazard
    warranty hazard

  • 10

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    Joe's Used Cars is a car dealership that sells cars on credit to anyone without doing a credit check. By the principle of _______, Joe's customers tend to be people with poor credit ratings.

    warranties
    private information
    adverse selection
    moral hazard

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