Which of the following is NOT a goal of financial regulation?
A) ensuring the soundness of the financial system
B) reducing moral hazard
C) reducing adverse selection
D) ensuring that investors never suffer losses
D
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Fill in the blank: Middlemen tend to have ________ in information production
A) no interest B) a comparative advantage C) a monopoly D) little time to engage E) a wasteful way of engaging
Chris has a one-hour break between classes every Wednesday. Chris can either stay at the library and study or go to the gym and work out. The decision Chris must make is:
A. not an economic problem because it's an hour that Chris has no matter what he does. B. not an economic problem because neither activity costs money. C. an economic problem because the tuition Chris pays covers the cost of both the gym and the library. D. an economic problem because Chris has only one hour, and engaging in one activity means giving up the other.
Surveys of consumers indicate that:
a. they do not care at all about labor standards in other countries. b. many are willing to pay at least a small amount more for imports to ensure good labor standards in other countries. c. most are willing to pay a large amount more for imports to ensure good labor standards in other countries. d. they will not buy imports from any country with poor labor standards.
In the presence of asymmetric information, a fixed-fee contract
A) achieves production efficiency.
B) can lead to opportunistic behavior on the part of the agent.
C) is impossible to write.
D) will result in the principal earning all of the profit.