With debt financing
A) moral hazard problems are eliminated.
B) moral hazard problems are reduced but not eliminated.
C) adverse selection problems are eliminated.
D) firms reduce the risk that they will become bankrupt during a recession.
B
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Suppose that Tom bought a bike from Helen for $195. If Helen's reservation price was $185, and Tom's reservation price was $215, the seller's surplus from this transaction was:
A. $20 B. $215 C. $195 D. $10
An increase in foreign incomes
A) increases aggregate demand in the United States. B) increases the aggregate quantity demanded in the United States. C) decreases the aggregate quantity demanded in the United States. D) decreases aggregate demand in the United States.
Refer to Table 2-2. Assume Nadia's Neckware only produces ascots and bowties. A combination of 24 ascots and 12 bowties would appear
A) along Nadia's production possibilities frontier. B) inside Nadia's production possibilities frontier. C) outside Nadia's production possibilities frontier. D) at the horizontal intercept of Nadia's production possibilities frontier.
Which furniture production process would have the highest wage rates?
a. furniture made by handsaw and hammer b. furniture made with power equipment c. furniture made by grade school-educated workers d. furniture made in an automated furniture factory