When information asymmetry exists in a market, government:
A. always steps in to try to correct it.
B. never steps in to try to correct it.
C. sometimes steps in to try to correct it.
D. only steps in to correct it if it can ensure complete information.
C. sometimes steps in to try to correct it.
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Under some circumstances, trade could stifle the development of new industries and reduce global efficiency. All of the following describe conditions that could lead to that situation EXCEPT
A) an initial head start gives a scale advantage to already existing firms in one country. B) diseconomies of scale make it impossible for new firms to enter the market. C) a location has a better-developed linkage between suppliers and producers, giving it a cost advantage. D) a historical accident, such as the shifting of airplane production to the United States to avoid World War II bombings, causes firms in one location to have a competitive advantage.
The theory that monetary policy conducted on a discretionary, day-by-day basis leads to poor long-run outcomes is referred to as the
A) adverse selection problem. B) moral hazard problem. C) time-inconsistency problem. D) nominal-anchor problem.
The table above gives the total cost information for Hank and Helen's cherry farm. They sell their cherries in a perfectly competitive market, where the price is $6.00 per pound. If Hank and Helen produce and sell 6 pounds of cherries, what is their profit?
Select one: a. $6 b. $20 c. $28 d. $8
Which of the following would likely cause aggregate demand to shift to the left?
A. Higher tariffs on all imports into the United States B. Greater consumer confidence about the future C. Higher interest rates discouraging borrowing D. All of these would likely cause aggregate demand to shift to the left.