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e130md2_Practice - Professor Valerie Ramey Econ 130...

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Professor Valerie Ramey Econ 130 Practice Midterm 2 1. (4 Points) For each of the situations in the left hand column, match the concept in the table below that best explains the situation. Concepts (i) Rivalrous and nonexcludable (vi) Nonrivalrous and nonexcludable (ii) Imperfect information (vii) Free rider problem (iii) Moral hazard (viii) Risk pooling (iv) Nonrivalrous and excludable (ix) Symmetric preferences (v) Adverse selection Please write the Roman numeral of the concept next to the letter for each situation. No explanation is necessary unless you believe there is an ambiguity. Situation A. Workers who lose their jobs in Europe (where jobless benefits are higher) are likely to stay unemployed longer than workers in the U.S. B. The ocean’s fish are being depleted. C. Individuals’ ability to buy private genetic testing may cause problems for medical insurance companies. D. A national park that charges entry fees during the off-season with few crowds.
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