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
You might also like to view...
In general, a nation can enjoy a higher standard of living by ________ than by being self-sufficient.
A. specialization and trading B. taxing imported goods C. increasing its versatility D. avoiding trade with other nations
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
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.
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