Adverse selection arises when:
A. the wants of both parties are aligned with one another.
B. buyers and sellers have different information about the quality of a good or the riskiness of a situation.
C. buyers and sellers with the same information about the quality of a good or the riskiness of a situation seek each other out.
D. people behave in a riskier way because they have incomplete information.
B. buyers and sellers have different information about the quality of a good or the riskiness of a situation.
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The average price of gasoline in June of 2008 in the United States was $3.79 . This was up by 82 cents from the previous year. Forecasters are expecting a drop in gasoline consumption of about 1% for the first time in 16 years
Even though this is a historic moment what do the figures still demonstrate about the elasticity of demand for gasoline? If the price increases go unabated what is likely to happen to the long-run price elasticity for gasoline and why?
All of the following are factors that raise economic development EXCEPT
A) establishing a legal system. B) an educated work force. C) reducing trade barriers. D) government control of the country's resources.
A firm experiencing economic losses will still continue to produce output in the short run as long as
A. Price is above average variable cost. B. Revenues are greater than total fixed cost. C. Price is above average fixed cost. D. MR = MC.
Reform of a country's trading system, including the reduction or elimination of trade barriers, is an example of
A) an orthodox stabilization plan. B) a heterodox stabilization plan. C) import substitution industrialization. D) structural reform.