If Global Warming Began to Cause Random World-Wide Damage to Crops,insurance

question 39

Multiple Choice

If global warming began to cause random world-wide damage to crops,insurance companies

• A) would insure against specific crop failures.
• B) would not insure against specific crop failures.
• C) would be indifferent between insuring or not.
• D) would find themselves facing prosecution for ignoring the problem for so long.

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Definitions:

Wage Rate

The wage rate is the amount of compensation a worker receives per unit of time worked, often expressed per hour or per year.

Marginal Revenue Product

The extra revenue generated by employing one additional unit of a resource, such as labor or capital.

Diminishing Marginal Returns

A principle stating that after an optimal point, further increases in one input while holding others constant will result in smaller and smaller gains in output.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a variable input.