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Practice Questions
Moral Hazard Practice Questions
Identify which of the following situations are caused by moral hazard: Fred lives in an apartment above a restaurant, and his apartment always smells like burgers and fries. He has tried unsuccessfully to get the restaurant owner to remedy the problem.
*
a. Caused by moral hazard
b. Not caused by moral hazard
Maria is halfway to work before she realizes that she forgot to lock the back door. Because she has renter’s insurance, she decides it is not worth being late just to go home to lock the door.
*
a. Caused by moral hazard
b. Not caused by moral hazard
Your friend, Paris, has super-rich parents who gave her an Audi for her 16th birthday party and have lavished her with luxury items throughout her entire life. She tells you that she has never felt the need to get good grades in school or succeed at a job because her parents provide her with everything.
*
a. Caused by moral hazard
b. Not caused by moral hazard
In the car repair market, moral hazard is a problem because
*
a. The car owner might pay money for a repair or service that was not needed.
b. The car owner might opt not to get a repair that was actually needed for fear of being ripped off.
c. The car owner has more information about the car’s status than the car mechanic.
d. A & B only.
e. B & C only.
f. A, B, & C.
Submit
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Principles of Economics Microeconomics
Course
(103 videos)
Introduction
Introduction to Microeconomics
Practice Questions
Opportunity Cost and Tradeoffs
Practice Questions
Marginal Thinking and the Sunk Cost Fallacy
Practice Questions
Interactive Practice
Supply, Demand, and Equilibrium
The Demand Curve
Practice Questions
The Supply Curve
Practice Questions
The Equilibrium Price and Quantity
Practice Questions
Understanding the Demand Curve: Shifts and Consumer Surplus
Practice Questions
Interactive Practice
What Shifts the Demand Curve?
Practice Questions
Change in Demand vs. Change in Quantity Demanded
Interactive Practice
Understanding the Supply Curve: Shifts and Producer Surplus
Interactive Practice
What Shifts the Supply Curve?
Interactive Practice
Exploring Equilibrium
Interactive Practice
Interactive Practice
Supply and Demand Terminology
Practice Questions
Does the Equilibrium Model Work?
Practice Questions
Elasticity and Its Applications
Elasticity of Demand
Practice Questions
Calculating the Elasticity of Demand
Practice Questions
Office Hours: Elasticity of Demand
Practice Questions
Elasticity of Supply
Practice Questions
Elasticity of Supply: Why Housing is Unaffordable
Practice Questions
Elasticity of Supply: Do Gun Buybacks Work?
Practice Questions
Taxes and Subsidies
Commodity Taxes
Practice Questions
Who Pays the Tax?
Practice Questions
Tax Revenue and Deadweight Loss
Practice Questions
Subsidies
Practice Questions
Wage Subsidies
Practice Questions
The Price System
I, Rose
A Price Is a Signal Wrapped up in an Incentive
Practice Questions
Markets Link the World
Practice Questions
The Great Economic Problem
Practice Questions
Information and Incentives
Practice Questions
Speculation
Practice Questions
Prediction Markets
Practice Questions
Price Ceilings and Price Floors
Price Ceilings
Practice Questions
Price Ceilings: Shortages and Quality Reduction
Practice Questions
Price Ceilings: Lines and Search Costs
Practice Questions
Price Ceilings: Deadweight Loss
Practice Questions
Price Ceilings: Misallocation of Resources
Interactive Practice
Price Ceilings: Rent Controls
Practice Questions
Rent Control in Mumbai
Practice Questions
Price Floors: The Minimum Wage
Practice Questions
Price Floors: Airline Fares
Interactive Practice
Why Do Governments Enact Price Controls?
Practice Questions
Price Controls and Communism
Practice Questions
Trade
The Big Ideas of Trade
Practice Questions
Comparative Advantage
Practice Questions
Another Look at Comparative Advantage
Practice Questions
Comparative Advantage Homework
Practice Questions
Tariffs and Protectionism
Interactive Practice
Arguments Against International Trade
Practice Questions
Avengers: The Story of Globalization (Optional)
Practice Questions
Externalities
An Introduction to Externalities
Practice Questions
External Benefits
Practice Questions
Command and Control Solutions
Practice Questions
The Coase Theorem
Practice Questions
Trading Pollution
Practice Questions
A Deeper Look at Tradable Allowances
Practice Questions
Externalities and Incentives: The Economics of COVID
Practice Questions
Costs and Profit Maximization Under Competition
Introduction to the Competitive Firm
Practice Questions
Maximizing Profit Under Competition
Practice Questions
Maximizing Profit and the Average Cost Curve
Practice Questions
Entry, Exit, and Supply Curves: Increasing Costs
Practice Questions
Entry, Exit, and Supply Curves: Constant Costs
Practice Questions
Entry, Exit, and Supply Curves: Decreasing Costs
Practice Questions
Competition and the Invisible Hand
Minimization of Total Industry Costs of Production
Practice Questions
The Balance of Industries and Creative Destruction
Practice Questions
Monopoly
Maximizing Profit Under Monopoly
Practice Questions
Office Hours: Calculating Monopoly Profit
Practice Questions
The Monopoly Markup
Practice Questions
The Costs and Benefits of Monopoly
Practice Questions
Price Discrimination
Introduction to Price Discrimination
Practice Questions
The Social Welfare of Price Discrimination
Practice Questions
Tying
Practice Questions
Bundling
Practice Questions
Labor Markets
The Marginal Product of Labor
Practice Questions
Econ Duel: Is Education Signaling or Skill Building?
Human Capital and Signaling
Practice Questions
The Tradeoff Between Fun and Wages
Practice Questions
Compensating Differentials
Practice Questions
Do Unions Raise Wages?
Practice Questions
Public Goods and the Tragedy of the Commons
Public Goods and Asteroid Defense
Practice Questions
A Deeper Look at Public Goods
Practice Questions
Club Goods
Practice Questions
The Tragedy of the Commons
Practice Questions
Asymmetric Information
Asymmetric Information and Used Cars
Practice Questions
Asymmetric Information in Health Insurance
Practice Questions
Moral Hazard
Practice Questions
Solutions to Moral Hazard
Practice Questions
Signaling
Practice Questions
Consumer Choice
Introduction to Consumer Choice
Practice Questions
Budget Constraints
Practice Questions
Indifference Curves
Practice Questions
Consumer Optimization
Practice Questions
Bonus Topics
Office Hours: Game Theory
Practice Questions
Exam
Principles of Economics: Microeconomics
