Unanticipated moral hazard contingencies can be reduced by
A) screening.
B) long-term customer relationships.
C) specialization in lending.
D) credit rationing.
B
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The deadweight loss with perfect price discrimination is
A) equal to the deadweight loss of a single-price monopoly. B) sometimes less than and sometimes more than the deadweight loss of a single-price monopoly. C) more than the deadweight loss of a single-price monopoly. D) zero. E) larger than the deadweight loss with perfect competition.
If there is a collusive agreement in a duopoly to maximize profit, then the price will
A) equal the marginal cost of production. B) equal the average total cost of production. C) be the same as the price set by a monopoly. D) be the same as the price set by a competitive industry.
If a firm's use of labor obeys the law of diminishing returns, then:
a. it does not have enough time to hire or fire workers. b. doubling the number of workers causes the firm's output to also double. c. its marginal costs must be falling. d. hiring additional workers adds less and less additional output.
Other things the same, which of the following would a rise in the real interest rate raise: desired investment spending, desired national saving, desired net capital outflow?