exam 3.0

Question 1

government intervention

Answer 1

productivity spillovers

Question 2

black and white

Answer 2

segregation

Question 3

insure job loss

Answer 3

unemployment insurance

Question 4

consumer aim

Answer 4

consumption smoothing; diminishing marginal utility

Question 5

$40,000
1%
99%

Answer 5

$40

Question 6

rational consumer no insure

Answer 6

marginal benefit is equal to the marginal cost of medical care

Question 7

entitlement age

Answer 7

62

Question 8

social security reform

Answer 8

lowering benefits for higher income groups

Question 9

fiscal imbalance

Answer 9

wage growth has slowed dramatically

Question 10

200 employ
55% 10 employ

Answer 10

the expected expenditure per worker is more predictable for large firms than it is for small firms

Question 11

moral hazard (UI)

Answer 11

an increase in the average duration of unemployment

Question 12

public insure not improve

Answer 12

many of those eligible for the public insurance already had private insurance

Question 13

MOOC
$30-$150

Answer 13

true, because the certificate doesn’t contribute to human capital but it can serve as a signal device.
since people are willing to pay for the certificate it shows that the screening mechanism has been realized in the labor market.

Question 14

U=log(c)
$30,000 5% $15,000 $5,000

Answer 14

a. expected utility without
EU= 0.95log(30,000)+0.05log(30,000-15,000-5,000)=10.25

b.actuarially
$15,0000.05=$750
EU
0.95log(30,000-750)+0.05*log(30,000-750-5,000)=10.27