Mutilple Choice :

1.A team of researchers has conducted a study of the well-being of the citizens of the island nation of Zarasa. Using a scale from 1 (least happy) to 10 (most happy), the researchers find that citizens who earn 100 Zarutas per year have a mean happiness of 2.0, those who earn 200 Zarutas per year have a mean happiness of 6.0, and those who earn 300 Zarutas per year have a mean happiness of 7.0. The researchers should make which of the following conclusions?

a.

The utility of Zarasians increases with income.

b.

The marginal utility of Zarasians decreases with income.

c.

The marginal utility of Zarasians increases with income.

d.

both A and C

2.Julia is a 28-year-old nonsmoking, non-drinking female of normal weight. Because of adverse selection in health insurance,

a.

she will be charged less for her premiums than people who are higher risks.

b.

when she get health insurance, she will be less likely to take care of herself.

c.

she must get health insurance early in life, and is likely to lose health insurance if she smokes, drinks to excess, or gains weight.

d.

she is less likely to buy health insurance than the average person, because policy premiums are based on expected medical expenditures of people who are less healthy than she is.