Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services
A) adverse selection
B) free-riding
C) discounting
D) moral hazard
D
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Sometimes you will hear economists argue that the infant industry argument against free trade is a weak one because these industries never seem to "grow up." What is meant by this argument?
What will be an ideal response?
Sarah gets a salary increase of 20 percent. Before her raise, she purchased 5 pounds of hamburger and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of hamburger and 3 pounds of beef stew a month. If everything else is held constant, we know that
A) hamburger is an inferior good and beef stew is a normal good for Sarah. B) hamburger is a normal good and beef stew is an inferior good for Sarah. C) both hamburger and beef stew are normal goods for Sarah. D) both hamburger and beef stew are inferior goods for Sarah.
When marketing makes customers better informed about all firms in the market: a. demand curves for specific brands in the market are likely to become less elastic. b. each firm is likely to have less market power
c. firms are better able to foster stronger brand loyalty. d. the market power of individual firms is strengthened.
Which is of the following is an example of a progressive tax?
a. An excise tax on a luxury good b. An income tax whose rate increases as income increases c. Medicare tax, which is a percentage of income d. A payroll tax that does not increase beyond a certain level of income