Answer:
Option (D) is correct.
Explanation:
Asymmetric information occurs in a situation in which one of the two parties involved in a particular transaction have more information than the other party. This problem mostly occurs in a health insurance market where the a person to be insured have more information about his health than the insurance company.
Asymmetric information will result in two problems are as follows:
(i) Adverse selection
(ii) Moral hazard
Answer:
$1000
Explanation:
Given the policy coverage = $30000
The amount of deductible = $1000
Total damage of the car when the accident occurred = $6200
Below is the calculation to find the amount that Frank has to pay:
The amount payable by Frank out of pocket = Deductible amount
The amount payable by Frank out of pocket = $1000
Answer:
The depreciation for the first year is $75,000
Explanation:
In working hours method the depreciation on a fixed asset is charged using the ratio of numbers of hours utilized by the asset in a period and lifetime working capacity in hours.
First, we need to calculate the Depreciable value
Depreciable value = Cost of Asset - Salvage value = $315,000 - $15,000 = $300,000
Depreciation = Depreciable value x Numbers of hours worked / Total working capacity of Asset = $300,000 x 25,000 / 100,000 = $75,000
Answer:
A) cost
Explanation:
In economics, the cost of production is defined as the expenditures incurred to obtain the factors of production.
