A credit union faces a(n) ________ problem when it lends funds to a customer to remodel her home and the customer then opportunistically uses the funds for a gambling trip to Las Vegas.
A. adverse selection
B. moral hazard
C. free-rider
D. external cost
Answer: B
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In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month, which causes a shortage
Suppose that apartments are a normal good and incomes rise. The increase in income A) decreases the shortage. B) has no effect on the shortage. C) increases the shortage. D) raises the rent.
As canals, steamboats, and railroads were built,
a. home production declined. b. manufacturing by artisans increased. c. prices of basic goods like clothing increased. d. product quality declined. e. All of the above.
In consumer equilibrium, one dollar's worth of additional gasoline will yield the same marginal utility as one dollar's worth of additional cheese
a. True b. False Indicate whether the statement is true or false
Assume that the MPC is 0.85 and investment spending rises by $100 million. How much consumption spending will this generate in the second round of spending?
a. $15 million b. $85 million c. $100 million d. $118 million e. $185 million