An important distinction between the labor market and the market for commodities is:
a. that contracts are arrived at more easily in the former.
b. the individual attributes of the buyer and seller hold far more importance in the former case.
c. that it is impossible to prevent breach of contract in the labor market.
d. that the market for commodities is a matching market while the former is not.
B
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Indicate whether the statement is true or false
The putting up of outside collateral is
A) one form of the moral hazard problem. B) one form of the adverse selection problem. C) a signal of a high-quality borrower. D) a signal of a low-quality borrower.
Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly decreases. What happens to the industry in the long run?
a. It experiences no change from the original equilibrium b. It experiences a higher equilibrium price and produces less output c. It experiences a lower equilibrium price and produces less output d. It experiences the same equilibrium price but produces more output e. It experiences the same equilibrium price but produces less output
If Melanie's marginal benefit as a consumer in the jeans market is larger than the price of a pair of jeans,
a. Melanie will not purchase any more jeans. b. Melanie can benefit by purchasing more jeans. c. the opportunity cost of a pair of jeans is lower than the price. d. Melanie will decrease her total utility by purchasing more jeans.