If you sell your DVD player on eBay, you will be better informed about the quality of the product than any potential buyer. This is called
A) adverse selection.
B) asymmetric information.
C) moral hazard.
D) opportunistic behavior.
B
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Market failure or inefficient consumption will take place in the market structures EXCEPT for
A) perfect competition. B) monopolistic competition. C) oligopoly. D) monopoly.
The manager of a large luxury hotel chain is currently negotiating a four year contract with a linens supplier. The linens company will supply fresh laundered bedding and towels to the hotel over a four year period; however, the hotel chain can ends its contract with the linens company at the end of the first, second, or third years if the linens company does not supply quality linens. What can
the manager of the hotel chain do to avoid the end-game problem? A) Inform the linens company that the hotel chain will nominate them for a linens industry award if the linens company provides quality linens all four years. B) Pay the linens company in full at the beginning of the first year. C) Pay the linens company in full after the second year. D) Pay the linens company in full at the end of the third year.
During the period that many call the Great Recession:
A. GDP fell. B. unemployment rose. C. there was a sharp decrease in consumer spending. D. All of these are true.
Which of the following will cause an increase in U.S. gross exports?
A. An increase in U.S. consumer income. B. An increase in foreign consumer income. C. A decrease in foreign business income. D. A decrease in foreign business investment.