Adverse selection can occur when
A) all persons involved in a transaction have full information.
B) one person has information not available to others.
C) post-agreement incentives result in workers shirking.
D) nobody has any information about a particular product.
B
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Amy spends $5,000 on remodeling a storefront that she then opens as a take-out deli. Business has not been very successful, and she needs an additional $1,000 to keep the deli open. Which of the following is TRUE?
A) The $5,000 Amy spent on remodeling represents a part of the total variable cost of her business. B) The $5,000 Amy spent is a fixed cost of her business. C) The $1,000 represents her marginal costs of production. D) The $1,000 Amy needs to keep the deli open represents her total fixed costs.
Insurance companies do NOT cover losses that would
A) happen to all of the policyholders at once. B) happen with a very low probability. C) happen to just a handful of policyholders. D) happen with uncertainty.
"The Clayton Act repealed the Sherman Act so that only the Clayton Act remains in force." Is the previous statement correct or incorrect?
What will be an ideal response?
Which of the following is NOT a significant cost that a barter system imposes on an economy?
A) Many prices must be maintained for each good. B) Only agricultural goods may be traded. C) Specialization of labor is hindered. D) The costs arising from the problem of finding two people who each want what the other produces.