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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 4-7.

Multiple Choice Questions

1. What is a term used in economics that refers to a market process in which "bad" results occur when buyers and sellers have asymmetric information?
(a) Gresham's law.
(b) Asset allocation.
(c) Adverse selection.
(d) Pork barrel.

2. In an insurance policy, what is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses?
(a) Collateral.
(b) Deductible.
(c) Inflation.
(d) Subsidy.

3. What is generally a fungible, negotiable financial instrument representing financial value?
(a) Security.
(b) Option.
(c) Index fund.
(d) Portfolio.

4. According to the author in Chapter 2, the average annual income is what in the location where black rhinoceros horns are worth much on the black market?
(a) $8,700.
(b) $6,000.
(c) $2,500.
(d) $1,000.

5. When was Burton G. Malkiel born?
(a) 1925.
(b) 1932.
(c) 1918.
(d) 1907.

Short Answer Questions

1. According to the author, insurance companies want to save money while doctors want to help patients and avoid what?

2. According to the author in Chapter 1, companies want to profit, and consumers want what?

3. According to Burton G. Malkiel in the Forward, economists often don't show a connection to what?

4. What refers to the degree to which a correct forecast of a system's state can be made either qualitatively or quantitatively?

5. What refers to a market where prices are determined by supply and demand?

(see the answer key)

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