The government can help solve the information asymmetry problem by:
A. making markets illegal where information asymmetry is significant.
B. requiring the more informed party to reveal the missing information.
C. excluding those who do not have complete information from the market.
D. telling less-informed parties not to participate in the market.
Answer: B
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The above figure shows the market for 2 bedroom town homes in San Diego. If a rent ceiling is set at $1,000 per month, what is the maximum rent someone is willing to pay in the black market?
A) $1,300 per month B) $1,000 per month C) $900 per month D) $1,100 per month E) $1,400 per month
The ratio of money created by the lending activities of the banking system to the money created by the government's central bank is called the:
A. money multiplier. B. reserve ratio. C. federal funds. D. demand deposits.
When entry occurs in a monopolistically competitive industry, which of the following will likely occur?
a. Marginal costs to society will exceed the price people are willing to pay. b. Price will be equal to the marginal revenue gained by society. c. The marginal revenue curve will shift to the left. d. A smaller quantity will be demanded at any given price.
If government purchases increases by $1 million while net taxes are unchanged, then:
A. private saving increases. B. public saving does not change. C. public saving increases. D. public saving decreases.