Refer to the scenario above. Which of the following problems is likely to occur in this market?
A) The fallacy of composition
B) Moral hazard
C) Adverse selection
D) The free-rider problem
C
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A change in the ceteris paribus conditions for supply will lead to a
A) change in quantity supplied. B) change in supply. C) change in quantity supplied and a change in supply. D) change in how consumers view the quality of the good.
The "lemons" problem is that
a. cars of verifiable high quality are withheld from the used car market b. cars of verifiable low quality are withheld from the used car market c. cars of unverifiable high quality are withheld from the used car market d. cars of unverifiable low quality are withheld from the used car market
A country currently is using all its land to produce wheat and grapes. However, the land most suited to growing grapes is being used to produce wheat, and the land most suited to growing wheat is being used to produce grapes. Which of the following statements is true?
a. Production of both wheat and grapes can be increased by shifting tracts of land to their best uses. b. Production of both wheat and grapes can be increased only if more land becomes available. c. production of wheat can increase only if production of grapes decreases. d. Production of grapes can increase only if more labor and machinery become available. e. Production of neither wheat nor grapes is possible without more land becoming available.
Refer to the provided supply and demand graph of Product X. What would happen if the government taxed the producers of this product because it has negative externalities in production?
What will be an ideal response?