________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction
A) Adverse selection B) Risk aversion C) Moral hazard D) Fraud
C
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Which of the following is a negative effect of economic growth?
A) higher inflation B) environmental pollution C) higher unemployment D) all of the above
All of the following are ways in which the government can help insure the quality of information consumers receive except
A) enforcing truth-in-advertising standards. B) awarding monopolies to political supporters and family members. C) requiring businesses to undergo audits of their financial conditions. D) publishing the academic performance of schools.
In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does not inflate its costs, then consumer surplus will be
A) $192 million. B) $108 million. C) $216 million. D) $60 million.
Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is
A) .25. B) .75. C) $1,000/$750 = 1.33. D) 1/.25 = 4.