The presence of adverse selection in a market causes:
A. some transactions to fail to take place.
B. market failure.
C. a deadweight loss.
D. All of these statements are true.
Answer: D
You might also like to view...
Tom's marginal utility of Mountain Dew exceeds his marginal utility of crackers at his consumer equilibrium. Therefore, his consumer surplus from Mountain Dew must exceed his consumer surplus from crackers
Indicate whether the statement is true or false
Jeff owns a garage and has 3 mechanics to help him. With the tools used being fixed in the short run, his production function is given by 5 + 2L = Y , where L is the number of mechanics and Y is the number of cars they can fix. If Jeff hires a fourth mechanic, what will be the marginal product of the new mechanic hired?
a. 11 b. 13 c. 2 d. 7
A normal good is a good for which demand increases as the
a. income of demanders increases b. price of the good increases c. price of close substitutes decreases d. total number of consumers decreases e. supply of the good increases
Evaluate this statement: “If the economic profit is zero, a business will shut down.”
Please provide the best answer for the statement.