Moral hazard and adverse selection are similar asymmetric information problems but moral hazard involves hidden actions while adverse selection involves hidden characteristics
a. True
b. False
Indicate whether the statement is true or false
True
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Attractive industries have all the following, except
a. High supplier power b. Low buyer power c. High entry barriers d. Low rivalry
Total revenue
a. can be calculated directly from the demand curve. b. can be calculated directly from the average revenue curve. c. is found by multiplying price times quantity. d. All of the above are correct.
With time, an appreciation in the value of the nation's currency in the foreign exchange market would cause
a. the nation's imports to increase and exports to decline. b. the nation's exports to increase and imports to decline. c. both imports and exports to decline. d. both imports and exports to rise.
Use the following graph showing the long-run supply and demand curves in a perfectly competitive industry to answer the next question.
The curves suggest that this is
A. a decreasing-cost industry. B. an increasing-cost industry. C. a constant-cost industry. D. not possible, because the supply curve is always upward sloping.