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Matching Post Quiz
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Match the correct answers below.
1


An action that reduces the risks involved in owning an asset or commodity by making a counteracting sale of that asset.

2


A process that transfers risk from one person to many people as small risk.

3


This will generally be less than the cost of moving the good from one market to the other as a result of arbitrage.

4


Occurs when people with the highest risk are most likely to buy insurance.

5


When the displeasure from losing a given amount of income is greater than the pleasure from gaining the same amount of income will cause a person to be.

6


Buying and selling assets or commodities with the purpose of making profits from the fluctuations in prices.

7


A form of risk spreading.

8


Improve price, improve allocation patterns, and transfer risks.

9


The purchase of a good or asset in one market for immediate resale in another market in order to profit from a price discrepancy.

10


The situation where people know about their own health status or level of risk, but the insurance company does not.

11


Mandatory insurance provided by the government.

12


A process that reduces a person's incentives to avoid or prevent a risky event and thereby changes the probability of loss.

13


Analyzes the way that two or more players choose strategies that jointly affect each other.

14


A situation where the market is supplied by two firms that are deciding whether to engage in economic warfare of prices.

15


Exists when all players have a dominant strategy.

16


Noncooperative equilibrium.

17


Arises when one player has a single best strategy no matter what strategy the other player follows.

Answer choices for questions 1 through 17
A)Hedging
B)Risk spreading
C)Duopoly price game
D)Nash equilibrium
E)Dominant strategy
F)Adverse selection
G)Insurance
H)Asymmetric information
I)Speculative markets
J)Arbitrage
K)Dominant equilibrium
L)Speculation
M)Social insurance
N)Moral hazard
O)Price difference
P)Game Theory
Q)Risk-averse





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