Which of the following statements is true?
A. Adverse selection is a problem of monopoly and moral hazard is a problem of information asymmetry.
B. Adverse selection and moral hazard are problems stemming from asymmetric information.
C. Moral hazard is a problem that occurs before a transaction.
D. Adverse selection is a problem that occurs after a transaction.
Answer: B
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The figure above represents the competitive market for slices of key lime pie. If the production is 80 slices per day, the cost of the 80th slice is
A) less than anyone is willing to pay for it. B) more than anyone is willing to pay for it. C) equal to what someone is willing to pay for it. D) indeterminant. E) equal to the deadweight loss from the 80th slice.
If input prices for a perfectly competitive industry remain constant as the output of the industry expands in the long run, the industry supply curve will:
a. have a positive slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical.
The Fed is one of the largest departments within the U.S. Treasury
Indicate whether the statement is true or false
A downward-sloping line that makes a 45-degree angle with the horizontal and vertical axes has a slope of:
A. infinity. B. zero. C. 1. D. -1.