E-bay, Amazon and other Internet shopping sites provide "seller ratings" done by previous buyers, in order to help deal with the problem of:
A. Adverse selection
B. Externalities
C. Moral hazard
D. Public goods
A. Adverse selection
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A surplus exists in the market for Barbie dolls at the prevailing price. The surplus will be eliminated by a price: a. increase, decreasing the supply and increasing the demand
b. decrease, decreasing the supply and increasing the demand. c. decrease, increasing the quantity supplied and increasing the quantity demanded. d. decrease, decreasing the quantity supplied and increasing the quantity demanded.
Monetarists believe that to promote long-term economic growth, national governments should:
a. Increase government spending and reduce taxes. b. Reduce government spending and increase taxes. c. Promote research and development with federal funds. d. Impose tariffs and quotas until the nation is on its feet. e. Create stable and predictable political environments and encourage competitive markets.
Economists describe the stock market as being a ______.
a. wild ride b. random walk c. leisurely stroll d. dead run
Explain how each of the following market forces helps reduce incentive conflicts between shareholders and management: a) the market for corporate control, b) the managerial labor market, and c) the product market.
What will be an ideal response?