When you purchase insurance, what are you doing?
a. reducing the risk of a loss.
b. transferring the risk of a loss.
c. avoiding the risk of a loss
d. retaining the risk of a loss?

Mankiw attributes – chapter 1 and his 10 principles – differences in living standards within a countryover time and across countries at a moment in time to: a. the presence or absence of inflation and unemployment.b. the allocation of resources between private markets and the public sector.c. those that have dealt successfully with the efficiency v. equality tradeoff and those that haven’t.d. differences in productivity.e. ones that think at the margin and respond to incentives and those that don’t.