In economics, abstraction from reality is necessary because of the complexity of the real world
a. True
b. False
Indicate whether the statement is true or false
True
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Rent control is an example of a price ceiling. Which of the following problems must be addressed under a rent control program?
a. what to do with the surplus of rental units b. how to subsidize renters so that they can afford to pay the higher rents c. how to decrease the quantity of rental units to the equilibrium level d. whether the opportunity cost of rental units equals the competitive market price e. how to allocate scarce rental units
Liam is willing to cut lawns for a minimum of $200 a week. He is, however, paid $250 for the same service by a lawn maintenance company. This is an example of
a. consumer surplus. b. employment discrimination. c. producer surplus. d. the derivation of accounting profit.
The following list of characteristics are true of the pharmaceutical industry, except one.
a. Low variable cost b. Virtually guaranteed profits when the product is introduced c. High fixed cost d. Exclusive rights to market and sell patented products e. Segmentable markets
If depository insurance exists, bank managers may make riskier loans than they would have otherwise, which is an example of
A. moral hazard. B. regulatory lag. C. adverse selection. D. irrational behavior.