A bank usually treats the moral hazard problem by using all of the following, except:
A. requiring collateral.
B. restrictive covenants.
C. not making loans.
D. requiring down payments.
Answer: C
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If average total cost is $50 and average fixed cost is $15 when output is 20 units, then the firm's total variable cost at that level of output is
A) $1,000. B) $700. C) $300. D) impossible to determine without additional information.
Given the information in the table above, if the Home economy suffered a meltdown, and the Unit Labor Requirements doubled to 20 for cloth and 40 for widgets then home should
A) export cloth. B) export widgets. C) export both and import nothing. D) export and import nothing. E) export widgets and import cloth.
In industrywide advertising, managers have an incentive to ________ and ________ for the advertising.
A) free -ride; not pay B) franchise; pay C) franchise; not pay D) free -ride; pay
For any country that allows free trade,
a. domestic quantity demanded is equal to domestic quantity supplied at the world price. b. domestic quantity demanded is greater than domestic quantity supplied at the world price. c. both producers and consumers in that country gain when domestic products are exported, but both groups lose when foreign products are imported. d. the domestic price is equal to the world price.