It will not benefit a seller to provide verifiable information to buyers about the seller's product
Indicate whether the statement is true or false
F It is possible that improved information will benefit the seller of a high-quality product, by enabling buyers to realize it is of high quality.
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An undervalued domestic currency:
A) harms all the economic agents in the country. B) benefits all the economic agents in the country C) makes imports more expensive for domestic consumers. D) can be achieved by buying the domestic currency.
Moral hazard is not eliminated in debt financing because
A) borrowers have an incentive to assume greater risk than is in the interest of the lender. B) firms with a great deal of debt often go bankrupt. C) principal-agent problems are greater with debt financing than with equity financing. D) the use of restrictive covenants tends to increase moral hazard.
Consider a labor market that is initially in equilibrium. When the labor demand curve shifts to the left while the labor supply curve remains unchanged, the: a. equilibrium wage rate increases
b. price of the output that uses this labor resource increases. c. equilibrium number of workers hired increases. d. equilibrium wage rate falls.
Two types of private solutions to the problem of externalities are
a. charities and the Golden Rule. b. charities and subsidies. c. the Golden Rule and taxes. d. taxes and subsidies.