One difference between moral hazard and adverse selection is
a. Adverse selection has to do with unobservable characteristics of individuals
b. Moral hazard has to do with unobservable actions of individuals
c. Adverse selection is individuals change their behaviors because of a contract
d. Only A&B
d
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The successor organization to GATT, created in 1995, is the
A) WTO. B) EU. C) NAFTA. D) FDIC.
The labor supply curve
a. slopes upward to illustrate that more people will want to work as the real wage increases b. slopes upward to illustrate that changes in the real wage are directly proportional to changes in the nominal wage c. may slope either upward or downward, depending upon the real wage d. slopes downward to illustrate that a decrease in the real wage decreases the number of individuals willing to work e. slopes downward to illustrate that the availability of workers is directly proportional to the real wage
In a price leadership situation, where one firm sets a price for others to follow, the leading firm is the one with the
a. largest market share b. highest quality good c. most elastic demand curve d. least elastic demand curve e. most efficient production
To the extent that brand names developed in monopolistic competition provide a benefit to the consumer, it is:
a. by allowing for a lower total cost. b. through their assurance that the firm will provide a quality product in order to preserve repeated transactions. c. by encouraging the entry of new competitors. d. by allowing the firm to engage in price discrimination.