Because information is scarce
A) helps explain why equity contracts are used so much more frequently to raise capital than are debt contracts.
B) monitoring managers gives rise to costly state verification.
C) government regulations, such as standard accounting principles, have no impact on problems such as moral hazard.
D) developing nations do not rely heavily on banks for business financing.
B
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Suppose an individual inverse demand curve is given as P = 2 - 1/2 qi, where qi is the quantity demanded by individual i. There are 50 individual consumers with this identical, individual inverse demand curve. Solve for the market demand curve
What will be an ideal response?
DVD players and DVDs are:
A. complementary goods. B. inferior goods. C. independent goods. D. substitute goods.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
Pharmaceutical companies receive patents as an exclusive right to produce a drug. This results in
a. normal profits on the patented drug. b. monopoly status in the production of the drug. c. lower prices for patients requiring the drug. d. orphan drug status. e. fewer new chemical compounds discovered.