The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is
A) asymmetric information. B) inefficient market hypothesis.
C) information disparity. D) moral hazard.
A
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A regressive income tax is defined as a tax for which
A) total taxes paid increase with the level of income. B) total taxes paid are independent of the level of income. C) the average tax rate increases with the level of income. D) the average tax rate decreases with the level of income.
Karl can produce either 10 tons of oranges or 5 tons of apples in a year, while Adam can produce either 5 tons of oranges or 10 tons of apples. If the exchange rate between apples and oranges in international markets is 1 ton of apples per 3 tons of oranges: a. Karl and Adam will not trade apples and oranges with one another, since both will specialize in and export oranges to other
countries. b. Karl and Adam will not trade apples and oranges with one another, since both will specialize in and export apples to other countries. c. Karl and Adam will trade apples and oranges with one another. d. Karl and Adam will not specialize or engage in international trade.
A utility-maximizing consumer will choose a collection of goods
a. represented by a point below her budget line b. represented by a point above her budget line c. for which the marginal utility from each good is the same d. for which the marginal utility divided by the price is the same or each good e. for which the total utility from each good is the same
Firms often seek to borrow money to expand their capital stock, and the price they pay for the money is the interest rate. What happens to supply of money if the interest rate increases?
a. It increases. b. It decreases. c. It does not change. d. Uncertain-economic theory has no answer to this question.