Adverse selection is a problem that arises:
A. before the parties have entered into an agreement.
B. either before or after the parties have entered into an agreement.
C. rarely in any market.
D. after the parties have voluntarily entered into an agreement.
Answer: A
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By convention, commercial paper issuers are divided into
A) individuals and corporations. B) private institutions and government institutions. C) large businesses and small businesses. D) financial companies and nonfinancial companies.
If a firm produces 10 units, TC=$100 . When the firm increase its output to 15 units, TC= $150 . The firm's AVC equal to
a. $5 b. $10 c. $50 d. $100
If the government decreases the income tax rate, they assume it will affect which component of GDP?
A. C B. NX C. G D. A change to the income tax rate will not affect any of these components.
Which of the following is not true with regard to pollution control through transferable pollution rights?
a. It does not require the government to know in advance the pollution abatement techniques to be utilized. b. It creates an incentive to develop improved pollution abatement technologies c. It ultimately requires all firms to reduce pollution in equal amounts. d. It established private property rights that can be sold.