It is possible to have:

A. moral hazard without adverse selection present in a market.
B. both moral hazard and adverse selection present in a market.
C. adverse selection present in a market without moral hazard.
D. All of these statements are true.


Answer: D

Economics

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In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________, everything else held constant

A) up; rise B) up; fall C) down; rise D) down; fall

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Consider a firm with the following cost and revenue information: ATC = $8, AVC = $7, and MR = MC = $6 . If the firm produces Q = 60 in the short run, it:

a. is minimizing losses. b. makes a total loss of $60. c. should produce more output. d. is making a mistake and should shut down. e. is maximizing total profit.

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Because nothing in life is free, the cost of a price ceiling program is chronic excess supply

Indicate whether the statement is true or false

Economics