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The Undercover Economist Flashcards | StudBud
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The Undercover Economist
The Undercover Economist
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Answers
1
Why is keyhole economics important?
it provides an efficient way to deal with market failures
it prevents market failures
it gets rid of the issue of inside information completely
it gets rid of the risk of the insurance company being destroyed
2
Which of the following is not a theme specific to chapter 5?
inside information in health insurance
supply and demand
issue of inside information
fixing healthcare with keyhole economics
3
What was the first example Harford used when talking about inside information?
farmers and landowners
The used car market
none of the above
locations of coffee shops
4
What is marginal land?
none of the above
land in which crops produced are worth more than the rent of the land
land in which crops produced are worth less than the rent of the land
land in which crops are worth the same as the rent of the land
5
Which of the following is an issue with government based healthcare systems?
the system gets overcrowded, resulting in long wait lists for procedures
scarcity in money only allows certain programs/procedures to be paid for
both B and C
certain programs are required and cost the country a lot of money
6
What is the Green Belt in Europe?
an area in which property is free
a system in Europe in which goods are produced
an area in which it is easy to build
an area that protects national reserves and parks
7
What is the first theme of Chapter 5?
the issues that come with government paid healthcare systems
fixing healthcare with keyhole economics
supply and demand
the issue of inside information
8
How does location affect the profit of a business?
The location with less population surrounding it is best for profit
The most convenient location for customers brings in more profit
none of the above
The cheaper it is to rent that location, the more profit can come in
9
Which of the following are fundamentals of any economic structure? (Select multiple)
location
products
supply and demand
alliances
10
Why might Americans be so unsatisfied with our healthcare system?
the diminishing reputation of the entire industry
the high premiums
all of the above
the inequity when it comes to the deciding factors of a person's premium
11
What happens to the rent of a property if the demand for the property becomes low?
it increases
it stays the same
the rent and demand do not relate
it decreases
12
What does the profit of a business depend on?
supply and demand
the consumers
all of the above
the location
13
Who talked about the topic of inside information by writing "The Market for Lemons"?
Joe Stiglitz
Tim Harford
George Akerlof
Michael Spence
14
The problem of inside information can be solved without cost. (True or False)
False
True
15
Inside information helps balance a free market. (True or False)
True
False
16
What is supply and demand?
the desire for the product by the consumers
government spending
the availability of a product and the desire of buyers for the product
the availability of a product
17
What is the problem with inside information?
it is pointless because both parties are given the inside information
both B and C
it gives the investors an advantage in buying/selling stock
it is illegal
18
What factor(s) go into a business deciding on what property to rent out?
the density of shops surrounding the property
the amount of demand in that area
both B and C
making sure the property won't be so busy to the point of being overwhelmed
19
What is a moral hazard?
people act recklessly when not protected from risk which helps the company
people act more recklessly when protected from risk which hurts the company
the company doesn't have to worry about financial risks
people act more cautiously when risk is not a factor
20
What is scarcity?
shortness of supply
abundance of demand
abundance of supply
shortness of demand
21
What was Spence's solution to inside information?
none of the above
buyers and sellers need to prove they are dependable
buyers and sellers need to help the information gap themselves
hire an inside watchdog to be on the lookout for insider trading
22
Why is health insurance important?
without it, people would have to pay out of pocket for treatment
you gain access to preventive services
you can spend however much you want to and it wont hurt you
both A and B
23
What is the controversial topic that Harford discusses in the end of chapter 1?
capital gains tax
minimum wage
welfare
immigration
24
What are some reasons a health insurance company may not want to insure you?
your networth
your medical history
both B and C
your age
25
Why do insurance companies have deductibles?
all of the above
in order to raise claims
without them, people would be careless, hurting the company financially
in order to get as much money as possible out of the patient
