An example of adverse selection is
a. purchasing a new car sight unseen based on the recommendation of a neighbor.
b. high health-insurance premiums resulting from the poor health of people who buy policies
c. suppliers who charge more for better quality clothing than for lower quality clothing.
d. being talked into buying a low-quality item because the price is lower.
b
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From time to time, the Federal Reserve buys back government bonds from the private sector through a process called
A) voluntary redemption procedures. B) backflip bond investments. C) open market purchases. D) bond recall procedures.
The Pollution Prevention Act of 1990
a. replaced the National Environmental Policy Act of 1969 (NEPA) b. was repealed in 2005 c. ranks source reduction as the primary goal followed by waste treatment d. ranks recycling above source reduction
The international oil price hike by OPEC was an adverse supply shock faced by the United States in the 1970s.
a. true b. false
Use the above figure. The economic profit for this firm is
A. the distance between T and E. B. the distance between E and x-axis. C. zero. D. the distance between T and x-axis.