Econ Challenge Quiz Bowl 2

After getting insurance you become more risky

Moral Hazard

only insure healthy people or only bad drivers want insurance

Adverse Selection

Buyers and Sellers know different things

Assymetric Information

The owner and the person running the company have different goals

Principal Agent Problem

Externalities can be fixed without government if certain conditions can be met

Coase Theorem

Responsible for helping countries with short term financial problems

IMF

Responsible for helping countries with large scale contruction projects

World Bank

The number that best measures income inequality

GINI Ratio

The curve that best illustrates income inequality

Lorenz Curve

At full employment what type of unemployment is zero

Cyclical

Herfindahl index for an industry with 50 equal sized firms

200

Largest possible herfindahl index

10,000

When money is used to buy goods it is performing what function

medium of exchange

When money is used to save in a bank it is performing what function

Store of Value

What happens to a monopolist's output level if fixed costs are reduced

nothing

The principal goal of mercantalism was to accumulate

Gold

What makes up the largest part of GDP

Consumption (72%)

At the profit maximizing point of a good with a negative externality, what is the relationship between MSC and MSB

MSC > MSB

Which famous economist rejected Say's Law

Keynes

If the cross elasticity of two goods is negative what is the relationship between the goods

Complements

if the income elasticity of a good is negative what type of good is it

Inferior

If Mexico can produce avocados at a lower cost than the US, then mexico has what type of advantage in avocado production

Absolute

If mexico can produce with a lower opportunity cost than the US, then it is said they have what type of advantage

Comparative

What do we call the sum of the unemployment rate plus the inflation rate

The Misery index

When someone eats one more taco, what happens to their marginal utility and their total utility

Total utility increases, marginal utility decreases