A borrower who obtains funds from a lender to purchase additional inventory but uses the funds to finance a trip to Las Vegas for a weekend of gambling at the opening of a new casino is an example of:
A. the free-rider.
B. the moral hazard problem.
C. lax government regulation.
D. the problem of adverse selection.
Answer: B
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Which of the following is an example of capital income?
A) Wage paid to a worker B) Free lunch at work C) Interest earned on money lent out D) Free parking space in a mall
The graph of the budget line below has dollars on the vertical axis and food on the horizontal axis. Which statement is false? 
A. The vertical intercept represents all money available for purchasing. B. The distance OA shows the amount of money spent on OD amount of food. C. The horizontal intercept represents all the food the consumer could purchase with the budget available. D. If the amount of money available is known in this graph, then the absolute and relative price of food is known also.
The price elasticity of demand for labor will be greater, the
A) greater is the price elasticity of demand for the final product. B) more difficult it is to employ substitute inputs in production. C) smaller is the proportion of wage costs in the total cost of production. D) shorter is the time period under examination.
The firm in the above figure breaks even when market price is
A. H. B. G. C. E. D. I.