It is possible to have:
A. moral hazard without adverse selection present in a market.
B. adverse selection present in a market without moral hazard.
C. both moral hazard and adverse selection present in a market.
D. All of these statements are true.
D. All of these statements are true.
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A corn-chip maker who buys September corn futures in May at the time she signs a contract with Safeway to deliver 1000 cases of corn chips each month for the next year is
A) competing against speculators, who profit from price fluctuations. B) increasing her risk from price fluctuations. C) reducing her risk from price fluctuations. D) reducing or increasing her risk from price fluctuations, depending on what subsequently happens to the price of corn.
In the above figure for a monopolistically competitive firm, the total cost at the profit-maximizing point is
A) $480. B) $400. C) $540. D) $880.
Refer to the above figure. Unexpected contractionary monetary policy has caused the aggregate demand curve to shift to AD2. In the long run
A) real GDP will be Y1, and the price level will be P1. B) real GDP will be Y2, and the price level will be P2. C) real GDP will be between Y1 and Y2, and the price level will be above P1. D) real GDP will be between Y1 and Y2, and the price level will be below P2.
A free rider is a person who
a. will only purchase a product on sale. b. receives the benefit of a good but avoids paying for it. c. can produce a good at no cost. d. rides public transit regularly.