Economists refer to the actions people take after they have entered into a transaction that makes the other party to the transaction worse off as
A) bad faith.
B) economic inefficiency.
C) moral hazard.
D) market failure.
Answer: C
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Refer to Figure 16-9. Given that the economy has moved from point A to point B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
A) decrease the money supply B) increase interest rates C) increase government spending D) increase taxes
When the economy is operating well below capacity, an increase in spending tends to be reflected primarily in a(n):
a. lower level of employment. b. increase in price. c. lower level of output. d. higher level of output and employment. e. increase in business failures.
Which of the following was designed to head off panics among market participants and forestall crashes like the ones in October 1929 and October 1987?
a. Program trading b. Circuit breakers c. Derivatives d. Volatility index
Bob's Burgers is well-known for introducing new types of burgers every month. However, after a year, it was seen that the cost of changing the price tags and food menu every month was greater than the profit earned. In order to minimize the cost, Bob's Burgers digitized its menu. The cost experienced by Bob's Burgers exemplifies _____
a. sunk costs b. opportunity costs c. menu costs d. variable costs