If a good causes a positive externality, regulation might take the form of a
A. subsidy.
B. ban on the product.
C. tax.
D. price floor.
Answer: A
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A company that rewards its salespeople based on the number of sales made can expect
a. Higher sales prices b. Lower sales prices c. No sales d. All of the above
The deregulation of U.S. banking in the 1980s led to: a. increased profits at all banks
b. no change in banks' conduct. c. more bank failures than in the 1930s. d. the insolvency and collapse of many banks as they began to hold riskier assets. e. the end of FDIC insurance for banks that held risky assets.
Health insurance is subject to
a. Both asymmetric information problems and moral hazard problems b. Neither asymmetric information problems nor moral hazard problems c. Asymmetric information problems but not moral hazard problems d. moral hazard problems but not asymmetric information problems
As rational consumers, you attempt to maximize utility by allocating your time so that the expected marginal utility of the last unit of time spent in each activity is different
Indicate whether the statement is true or false