Mary is a low-risk applicant for a loan at a bank, while John is a high-risk applicant. If the bank increases the interest rates it charges on loans, _____
a. John is likely to leave the market for loans
b. the problem of moral hazard will prevent John from getting a loan
c. the commons problem will prevent Mary from getting a loan
d. Mary is likely to leave the market for loans
e. both Mary and John will leave the market for loans
d
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The excess burden of a tax is
a. the amount by which the price of a good increases. b. the loss of consumer and producer surplus that is not transferred elsewhere. c. The amount by which a person's after-tax income decreases as a result of the new tax. d. the welfare costs to firms forced to leave the market due to an inward shift of the demand curve.
In the short run, the net effect of an expansionary monetary policy is a lower trade deficit.
Answer the following statement true (T) or false (F)
No supply curve exists for a monopoly in the sense that a supply curve exists for a perfectly competitive firm.
Answer the following statement true (T) or false (F)
In the above figure, if there is no minimum wage, the equilibrium employment is ________; if the government imposed a minimum wage of $8 per hour, employment is ________
A) 4,000 hours; 2,000 hours B) 3,000 hours; 4,000 hours C) 3,000 hours; 2,000 hours D) 4,000 hours; 3,000 hours