Problem
1. Why is the distinction between insurable and uninsurable risks significant for the theory of profit? Carefully evaluate: "All economic profit can be traced to either uncertainty or the desire to avoid it." What are the major functions of economic profit?
2. Explain the absence of economic profit in a purely competitive, static economy. Realizing that the major function of profit is to allocate resources according to consumer preferences, describe the allocation of resources in such an economy.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.