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A) creates moral hazard but eliminates adverse selection.
B) creates adverse selection but eliminates moral hazard.
C) creates both moral hazard and adverse selection.
D) eliminates both moral hazard and adverse selection.
C
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An example of exclusive dealing occurs when
a. one individual serves on more than one board of directors b. one individual serves on only one board of directors c. a producer sells spark plugs to a car manufacturer with the understanding that the manufacturer will buy spark plugs only from that producer d. the seller offers a good for sale to an individual (or a limited group) on substantially better terms than is available to the general public e. a producer of spark plugs requires that customers also purchase rotors when they buy spark plugs
In the simple circular flow model: a. firms are suppliers of resources and demanders of products
b. households are suppliers of products and demanders of resources. c. households are demanders of products and suppliers of resources. d. firms are the suppliers of both resources and products.
If the government increases its spending or reduces its taxes in order to influence the level of economic activity, it is engaging in
a. regulatory policy b. antitrust policy c. monetary policy d. fiscal policy e. supply-management policy
The following table shows the units of output a worker can produce per month in country A and country B. Country Food Electronics Country A 20 5 Country B 12 4 The opportunity cost of I unit of food in country A is
A. ¼ of a unit of electronics. B. ½ of a unit of electronics. C. 1/3 of a unit of electronics. D. All of these.