FIGURE 6- 9

question 31

Multiple Choice

FIGURE 6- 9
-Refer to Figure 6- 9.In part (i) ,the line joining points A,B,and C is known as ,which shows how .

• A)an income- consumption line; consumption changes with changing relative prices and constant income
• B)a price- consumption line; consumption changes as relative prices change,with money income constant
• C)a price- consumption line; consumption changes as money income and relative prices change
• D)an income- consumption line; consumption changes as income changes,with relative prices held constant
• E)an indifference map; the value of various combinations of two goods changes

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Definitions:

Moral Hazard

A situation where a party is more likely to take risks because the negative consequences of the risk will be borne by another party.

Seat Belts

Safety devices designed to secure passengers in a vehicle against harmful movement that may result during a collision or a sudden stop.

Accidents

Accidents are unplanned events that can cause damage, injury, or loss, often stemming from unforeseen circumstances or negligence.

Adverse Selection

A situation in insurance and finance where higher-risk individuals are more likely to apply for or select a particular service, leading to potential losses for the insurer or lender.