Paying salespeople a fixed wage contract, one in which income does not depend on the volume of sales, avoids
A) both adverse selection and moral hazard.
B) neither adverse selection nor moral hazard.
C) adverse selection but not moral hazard.
D) moral hazard but not adverse selection.
B
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Which of the following statements is true of Black Wednesday?
A) Following Black Wednesday, the British pound became less valuable relative to the German mark. B) Currency traders who had borrowed pounds to buy German marks incurred huge losses due to Black Wednesday. C) The British government earned enormous profits by selling foreign currency reserves following Black Wednesday. D) Following Black Wednesday, the British pound became more valuable relative to the German mark.
A movie monopolist sells to students and adults. The demand function for students is QdS = 600 - 100P and the demand function for adults is QdA = 1,200 - 100P. The marginal cost is $2 per ticket. Suppose the movie theater cannot price discriminate. What is the monopolist's profit from both students and adults?
A. $2,500 B. $4,950 D. $50
If consumers elect to postpone consumption so they can have a more enjoyable future, the supply of loanable funds would increase and the market rate of interest would fall
a. True b. False
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.