Adverse selection is created by
A) incentives to change behavior after two parties have reached an agreement.
B) risk.
C) lump-sum taxes.
D) private information.
D
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If everyone pays a fixed dollar amount of tax, then the tax is a
A. regressive tax. B. personal tax. C. marginal tax. D. proportional tax.
In a zero-sum game
A) the gains of one player are less than the gains of the other player. B) the gains of one player are greater than the gains of the other player. C) the gains of one player directly reflect the losses of another player. D) the gains and losses of players are all expressed in zeros.
Suppose you are in charge of setting prices at a local ice cream shop. The business needs to increase its total revenue, and your job is on the line. You evaluate the data and determine that the price elasticity of demand for ice cream at your shop is 1.8 . You should
a. increase the price of ice cream. b. decrease the price of ice cream. c. decrease the cost of operating the ice cream shop. d. increase the price of bottled water also sold at the ice cream shop because its price elasticity of demand is 1.2.
In the efficiency wage model with the efficiency wage above the market-clearing wage, the level of employment depends on
A. the intersection of labor supply and labor demand. B. labor demand alone. C. labor supply alone. D. the marginal productivity of capital and the marginal productivity of labor.