All of the following are true regarding moral hazard except which one?

A) It arises when parties to a transaction have conflicting objectives and the supervising parties cannot monitor the other parties.
B) It typically occurs after participants have already entered into a contract or agreement.
C) It is a situation in which individuals make hidden actions that benefit them at the expense of the other parties.
D) Situations of moral hazard tend to be rare occurrences.


D) Situations of moral hazard tend to be rare occurrences.

Economics

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A ________ is the price at which a trading partner is indifferent between making the trade and not doing so

A) market value B) reservation value C) shadow value D) discounted value

Economics

The three oil shocks the U.S. experienced in 1973-1974, 1979-1980 and 2007-2008 had which of the following consistent results?

A) a decline in real wages due to an upward shift of the production function B) an increase in the rental price of capital along with a healthy stock market response C) a decline in real wages due to a downward shift of the MPL curve D) an increase in the rental price of capital due to an upward shift of the production function E) none of the above

Economics

What does the fact that U.S. students are falling behind other nations' students in math and science have to do with economic growth?

A) Nothing. People in the United States just don't like to fall behind in anything as a matter of pride. B) If U.S. students don't excel in math and science, the nation will see fewer plays written and fewer pieces of music composed. C) Better technology, a key to economic growth, depends largely on math and science skills. D) Math and science skills don't foster economic growth, but it takes math skills to calculate a nation's rate of economic growth.

Economics

If the average total cost of producing 2 pounds of cheese is $4 and the average total cost of producing 3 pounds of cheese is $4.2, then the marginal cost of producing third pound of cheese is equal to:

a. $4.2. b. $8. c. $4.5. d. $4.6. e. $4.1.

Economics