Which of the following is NOT true of adverse selection?
A) It would not exist in a world of perfect information.
B) It arises because borrowers typically know more than lenders.
C) It describes a lender's problem of distinguishing the good-risk applicants from the bad-risk applicants.
D) It describes a lender's problem in verifying borrowers are using their funds as intended.
D
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A firm's marginal cost is defined as
a. the ratio of total cost to total output. b. the ratio of total output to total cost. c. the additional cost of producing one more unit of output. d. the reciprocal of total average cost.
If V in the equation of exchange is constant, an increase in M will necessarily increase
A. P. B. Q. C. Both P and Q. D. P times Q.
If the cross elasticity of demand between car insurance and new cars is -0.41, then car insurance and new cars are
A) complements. B) substitutes. C) normal goods. D) inferior goods. E) unrelated goods.
Opera Estate Girls' School is considering increasing its tuition to raise revenue. If the school believes that raising tuition will increase revenue it is assuming that the demand for attending the school is
A) perfectly elastic. B) unit elastic. C) inelastic. D) elastic.