Loan guarantees provided by the government for specific private-sector investments tend to:
A. Generate high positive returns for the government
B. Increase the financial risk faced by the private investors
C. Attract private investors into the specific project
D. Eliminate the moral hazard problem among investors
C. Attract private investors into the specific project
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According to this Application, in Peru, producing palm oil is very profitable but is a time consuming process. Producing coca paste, an ingredient in cocaine, is not as costly or as time consuming as the production of palm oil
To switch Peruvian farmers from producing an ingredient used for cocaine to producing the profitable and safe palm oil would require A) improvements in finance and the ability to borrow funds. B) informal ownership of property. C) governmental approval. D) cocaine being declared illegal in Peru.
Behavioral economists have found that people ______________, and this leads to irrational decisions.
A. often forget money is fungible B. often undervalue opportunity costs C. often forget to ignore sunk costs D. All of these statements are correct.
In which one of these years was the U.S. poverty rate the lowest?
A. 1960 B. 1964 C. 1973 D. 1983
A potential entrant knows that it faces a (inverse) residual demand curve given by P = 50 ? 4Q. While the entrant does not know the inverse market demand, it does know that the incumbent committed to producing 150 units. Using this information, which of the following equations best summarizes the inverse market demand curve?
A. P = 200 ? Q B. P = 200 ? 4Q C. P = 150 ? 4Q D. None of the statements are correct.