As price rises, the quantity ______________ rises.
A. demanded
B. supplied
C. demanded and supplied
B. supplied
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Two consequences of asymmetric information are adverse selection and moral hazard. An important distinction between the two is
A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. C) moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity. D) adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity.
Why might firms pay an efficiency wage rather than a market-clearing wage?
What will be an ideal response?
In the four decades from 1860 to 1900, the U.S. population nearly tripled. Real Gross Domestic Product (GDP)
(a) fell by more than the amount by which the population increased. (b) fell by the same amount by which the population increased. (c) rose at about the same rate as the population increase. (d) increased by even more than the population increase.
Which of the following factors will reduce considerably the ability of a union to raise the wages of its workers?
a. an elastic demand for the goods produced by union labor b. a five-year apprenticeship before one can qualify for jobs held by union members c. high tariffs on goods produced by the union labor d. favoritism in the allocation of government contracts to firms that employ union labor