Because of the weak systems of property rights in many developing and transition economies, the financial system is unable to use collateral effectively worsening the ________ problem
A) adverse selection
B) moral hazard
C) principal/agent
D) diversification
A
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A person's consumption possibilities is defined by the budget line because
A) it marks the boundary between what is affordable and unaffordable. B) it represents the individual's preference for different combinations of goods. C) it marks the boundary between what can be produced and what is unattainable given the current state of technology and resources. D) all consumers must consume on their budget line.
Which of the following is an example of a direct tax?
a. sales tax b. property tax c. gasoline tax d. income tax
When deriving the production possibilities curve, it is assumed that
A) the amount of each good that is to be produced is fixed. B) the prices of resources are fixed along the curve. C) most resources can be used to produce only one good. D) resources are efficiently used.
If regulators disallow price increases requested by a natural monopoly that is currently earning an economic loss, quality of service will
A. likely fall. B. remain unchanged. C. increase rapidly. D. none of these.