- Module C .1: Your car insurance premiums are lower if you have had no moving vio...
- Module C .2: A common feature of home construction contracts is that when it cos...
- Module C .3: True or false? Explain your answer, stating what concept discussed ...
- Module C .4: Moral hazard is the result of a. asymmetric information. b. signali...
- Module C .5: A deductible is used by insurance companies to a. allow customers t...
Solutions for Chapter Module C : The Economics of Information
Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition
the idea that taxes should be levied on a person according to how well that person can shoulder the burden
a shortfall of tax revenue from government spending
the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own
consumer price index (CPI)
a measure of the overall cost of the goods and services bought by a typical consumer
the property of a good whereby a person can be prevented from using it
financial institutions through which savers can indirectly provide funds to borrowers
the amount of money in the future that an amount of money today will yield, given prevailing interest rates
something that induces a person to act
the total number of workers, including both the employed and the unemployed
law of supply
the claim that, other things being equal, the quantity supplied of a good rises when the price of the good rises
the political philosophy according to which the government should choose policies deemed just, as evaluated by an impartial observer behind a “veil of ignorance”
the increase in total cost that arises from an extra unit of production
the proposition that changes in the money supply do not affect real variables
a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen
a legal minimum on the price at which a good can be sold
a particular “game” between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial
goods that are both excludable and rival in consumption
unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one
total revenue (in a market)
the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold
Tragedy of the Commons
a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole
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