Possession of information by one party in a financial transaction but not by the other party is
A. financial intermediation.
B. informational hazard.
C. symmetric information.
D. asymmetric information.
Answer: D
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Before the Industrial Revolution, standards of living differed
A) greatly over time and across countries. B) little over time, but differed greatly across countries. C) greatly over time, but differed little across countries. D) little over time and across countries.
Assume that a firm's marginal revenue curve intersects the rising portion of its marginal cost curve at 500 units of output. At this output level, a profit-maximizing firm's total cost of production is $1,000 . If the price of the product is $5 per unit, the total revenue earned by the firm will be:
a. $1,500. b. $250. c. $500. d. $2,500. e. $1,000.
An increase in the price of cheese crackers from $2.25 to $2.45 per box causes suppliers of cheese crackers to increase their quantity supplied from 125 boxes per minute to 145 boxes per minute. Using the midpoint method, supply is
a. elastic, and the price elasticity of supply is 1.74. b. elastic, and the price elasticity of supply is 0.57. c. inelastic, and the price elasticity of supply is 1.74. d. inelastic, and the price elasticity of supply is 0.57.
In her book on the American work week, economist Juliet Schorr argues that Americans work too much. Her argument may be interpreted as concluding that this behavior
A. increases GDP but decreases well-being. B. increases GDP and increases well-being. C. decreases GDP and decreases well-being. D. decreases GDP but increases well-being.