If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller. This phenomenon is due to
A) moral hazard.
B) adverse selection.
C) economically irrational behavior.
D) gains from trade.
Answer: B
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When a consumer wants to compare the price of one product with another, money is primarily functioning as a
A. medium of exchange. B. checkable deposit. C. store of value. D. unit of account.
Buffalo in the United States almost became extinct while cattle, an animal that provides similar products, never has been close to extinction. The difference is due to
A) the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo. B) the greater marginal value of a buffalo relative to a steer, leading to the overharvesting of buffalo. C) cattle existing in Europe also while buffalo were specific to North America. D) the use of private property rights on cattle and common property rights on buffalo.
The two most important actors of the economy are:
A. firms and -capital. B. exports and imports. C. households and firms. D. land and capital.
Each of the following was an effect of cheap or free land during the 19th century except
A. a high birth rate. B. a high rate of immigration. C. a rapid rate of technological development. D. a high rate of migration from the farms to the cities.