Donald Has a Beach House on the Outer Banks of North

question 20

Multiple Choice

Donald has a beach house on the Outer Banks of North Carolina that was severely damaged in the most recent hurricane to strike the coast.Due to beach erosion,he has rebuilt twice in the past 20 years.He is intent on rebuilding,confident that government-provided flood insurance will cover his expenses.This is an example of:

• A) how market-based solutions to problems are superior to government solutions.
• B) moral hazard.
• C) adverse selection.
• D) asset substitution.
• E) none of the above.

Analyze the structures of attitudes and their influence on attitude change.

Recognize the use of persuasive techniques, such as low-balling, in attitude change.

Identify and explain the phenomenon of cognitive dissonance and its impact on attitudes and behaviors.

Understand the relationship between attitudes and behaviors, including the distinction between public and private behaviors.

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Definitions:

Aggregate Supply Curve

A graphical representation showing the relationship between the overall price level in an economy and the total output produced by that economy at various price levels.

Price Index

A number that shows the average price of products; changes in a price index over time show changes in the economy’s average price level.

Price Level

A measurement of the average of current prices across the entire spectrum of goods and services produced in the economy.

Aggregate Demand

The relationship between the economy’s price level and aggregate output demanded, with other things constant.