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Question: A. Multiple Choice. Answer all 16 questions. Circle one answer. 2 points each) 1. Suppose the sel...
Question: A. Multiple Choice. Answer all 16 questions. Circle one answer. 2 points each) 1. Suppose the sel...
Question: A. Multiple Choice. Answer all 16 questions. Circle one answer. 2 points each) 1. Suppose the sel...Problems
1,4,5,8,11,12,14,15 trying to correct a test to study from.

Show transcribed image text A. Multiple Choice. Answer all 16 questions. Circle one answer. 2 points each) 1. Suppose the seller of a good or service plans to use two- Pricing. What win the seller do in order to maximize total revenue? (Note: p price for additional units and F fixed fee for the right buy at price po Set p where demand is unit elastic. b. Set p as high as possible. c. Set the fixed fee F equal to consumer surplus. d. None of the above. 2. Under which condition will an individual be able to signal her superior ability by completing a college degree? a Completing a college degree is less costly for high-ability than for low-ability individuals b. Completing a college degree does not lead to higher salaries than those available to high school graduates. c. The government provides subsidies to encourage people to go to college. d. Completing a college degree is more costly for high-ability than for low-ability individuals. Suppose an individual has increasing marginal utility for money. Then a. this individual is risk neutral. b this individual is risk loving. c. this individual is risk averse. d. It is not possible to tell. 4. Which of the following helps explain why actual insurance premiums are higher than the fair premium? Administrative (or overhead) costs. Adverse selection. c. Moral hazard. d. Intense competition among insurance companies. e. Only an b, and c 5. Suppose a person faces a risky situation, leading to an expected value of wealth Eve If the person is risk averse, which of the following is E about her certainty equivalent (CE? a. CE EV d. This question cannot be answered without additional information about the utility function.

A. Multiple Choice. Answer all 16 questions. Circle one answer. 2 points each) 1. Suppose the seller of a good or service plans to use two- Pricing. What win the seller do in order to maximize total revenue? (Note: p price for additional units and F fixed fee for the right buy at price po Set p where demand is unit elastic. b. Set p as high as possible. c. Set the fixed fee F equal to consumer surplus. d. None of the above. 2. Under which condition will an individual be able to signal her superior ability by completing a college degree? a Completing a college degree is less costly for high-ability than for low-ability individuals b. Completing a college degree does not lead to higher salaries than those available to high school graduates. c. The government provides subsidies to encourage people to go to college. d. Completing a college degree is more costly for high-ability than for low-ability individuals. Suppose an individual has increasing marginal utility for money. Then a. this individual is risk neutral. b this individual is risk loving. c. this individual is risk averse. d. It is not possible to tell. 4. Which of the following helps explain why actual insurance premiums are higher than the fair premium? Administrative (or overhead) costs. Adverse selection. c. Moral hazard. d. Intense competition among insurance companies. e. Only an b, and c 5. Suppose a person faces a risky situation, leading to an expected value of wealth Eve If the person is risk averse, which of the following is E about her certainty equivalent (CE? a. CE EV d. This question cannot be answered without additional information about the utility function.