Firms rarely offer unlimited warranties on their products, because then their customers would be less careful with upkeep and maintenance. This situation is an example of
a. confiscation of rents.
b. a speculative bubble.
c. moral hazard.
d. the principal-agent problem.
c. moral hazard.
You might also like to view...
The completion of a degree or course of study is a good labor market signal
A) only if what is learned in that educational process relates directly to the job the individual is being considered for. B) only if there is a positive correlation between academic success and wage income. C) primarily because individuals develop good habits in college that serve them well in other areas later on. D) because all individuals have the opportunity (in the United States) to pursue higher education. E) because people who possess the traits that make them more productive in the workplace have an easier time completing an education than those who don't.
Why can cross price elasticity of demand be positive or negative, unlike the price elasticity of demand with respect to the item's own price?
What will be an ideal response?
If the Fed sells U.S. government securities to drain reserves from banks, which of the following is most likely to occur? a. The demand for money will increase and the interest rate will rise
b. The money supply will increase and the interest rate will fall. c. The interest rate will rise and the quantity of money demanded will fall. d. The money supply will decrease and the interest rate will fall. e. The interest rate will fall and the quantity of money demanded will increase.
An individual who is employed part time, but is looking for a full-time job, is classified as:
a. frictionally unemployed. b. cyclically unemployed. c. structurally unemployed. d. employed.