The difference between moral hazard and adverse selection is that moral hazard is about:
A. unobserved characteristics of people occurring before parties enter into an agreement.
B. never happens when adverse selection is a problem.
C. actions that arise after the parties enter an agreement
D. None of these statements is true.
C. actions that arise after the parties enter an agreement
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In case of a linear negatively sloped demand curve, the price elasticity of demand:
A) is zero between any two points on the curve. B) is the same between any two points on the curve. C) is different at different points on the curve. D) is equal to the slope between different points on the demand curve.
The Farm Factory, a booth at the local Farmer's Market, sells fresh eggs for $1.50 per dozen and fresh milk for $2.50 per gallon. What is the opportunity cost of buying a gallon of milk?
A) 3/5 of a dozen eggs B) $1.50 C) 1 2/3 dozen eggs D) $2.50
Discount loans intended for banks that are not financially healthy are called
A) primary credit. B) secondary credit. C) seasonal credit. D) repo loans.
If WarmWear, a U.S.manufacturer of winter clothing, opens a new factory in Austria, then
a. Austrian GNP increases by more than Austrian GDP, because GDP includes income earned by foreigners working in Austria. b. Austrian GNP increases by more than Austrian GDP, because GDP excludes income earned by foreigners working in Austria. c. Austrian GNP increases by less than Austrian GDP, because GDP includes income earned by foreigners working in Austria. d. Austrian GNP increases by less than Austrian GDP, because GDP excludes income earned by foreigners working in Austria.