"The Problem of Getting People to Buy Car Insurance Is

question 39

Multiple Choice

"The problem of getting people to buy car insurance is best solved by the market." This belief belongs to which type of economist?

• A) Behavioral
• B) Traditional
• C) Modern
• D) Keynesian

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Definitions:

Allocative Efficiency

A state of resource allocation where goods and services are distributed according to consumer preferences, maximizing overall societal welfare.

Productive Efficiency

A situation where a firm or economy produces output at the lowest possible cost, using all its resources efficiently.

Pure Competition

A market structure characterized by a large number of small firms, a homogenous product, and very easy entry and exit from the market.

Spillovers

Effects of an economic activity that impact third parties who are not directly involved in the activity, potentially leading to externalities.