Risk-seeking behavior:
A. is irrational.
B. is an aspect of an individual's preferences.
C. is the same for everyone.
D. All of these statements are true.
B. is an aspect of an individual's preferences.
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According to the new growth theory, competition
A) reduces profit. B) increases profit. C) has no impact on real profit, only nominal profit. D) is only theoretical because all firms are growing at some rate.
Collusion is a situation where businesses:
A. agree to cooperate, and the U.S. government works hard to encourage this behavior. B. have noncooperative outcomes, because they compete outside the public eye. C. agree to cooperate, and their behavior does not serve the public interest. D. act in their own self-interest and ignore what the other businesses are doing.
A shortage exists in a market if a. there is an excess supply of the good
b. quantity supplied exceeds quantity demanded. c. the current price is below its equilibrium price. d. All of the above are correct.
Landon goes shopping for a used car. One dealer provides a two-year warranty on all of its cars. What does the warranty do?
a. Signal that the dealer does not sell lemons. b. Signal that the car is probably a lemon. c. Allow the dealer to use adverse selection against Landon. d. Allow Landon to use moral hazard against the dealer.