Coal producers cannot profit by acting opportunistically toward U.S. Steel because:
a. there is a wide range of coal producers and substitution possibilities are high.
b. coal is a highly specific resource and trades at competitive prices.
c. the company usually enters into a delivery contract to obtain coal.
d. the market for coal is thin.
A
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What is the macroeconomic consequence if firms accumulate large amounts of unplanned inventory at the beginning of a recession?
What will be an ideal response?
Under the bimetallic standard of the 19th century:
a. the amount of money in circulation increased. b. the American dollar served poorly as a unit of account. c. only one metal tended to circulate as money at any given time. d. the government earned profits by selling gold.
Which of the following occurrences likely accounts for the situation shown?
a. a change in human capital
b. a decrease in government regulations
c. a permanent change in the supply of inputs
d. a negative supply shock
What is adverse selection?
A) It refers to the private, self-interested actions people that people pursue, which when taken collectively leads to a loss in economic surplus. B) It refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off. C) It refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction. D) It refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction.