With ________, the quality of what is being offered in a transaction matters and is not easily demonstrated.
A. adverse selection
B. asymmetric information
C. moral hazard
D. risk aversion
Answer: A
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The function of money as a store of value diminishes if
A) money is no longer backed by gold. B) prices of goods and services increase. C) people begin to barter. D) interest rates increase.
When firms cooperate with each other rather than compete:
A. consumers will end up better off. B. the firms will end up better off. C. both consumers and firms end up better off. D. they will agree to set low prices to help each other out.
In a graph showing the short-run cost curves, the one curve which declines continuously as we expand output is called
A. the average total cost curve. B. the marginal cost curve. C. the average variable cost curve. D. the average fixed cost curve.
Starting from long-run equilibrium, the long-run impact of a war that raises government purchases, compared to the original equilibrium, is:
A. higher inflation and higher output. B. lower inflation and the same output. C. lower inflation and lower output. D. higher inflation and the same output.