An example of moral hazard is
a. A taxi driver paid per mile taking the shortest route
b. a piece-rate garment worker shirking less than a per hour worker
c. an hourly salesman working harder than a commission salesman
d. an author on contract going to as many book signings as one with a percentage royalty rate
b
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Movies are $10 a ticket, and DVD rentals are $5 a DVD. With movies on the vertical axis, the magnitude of the slope of the budget line is
A) 1/2. B) 2. C) 5. D) 10.
According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government
a. True b. False Indicate whether the statement is true or false
The dollar is said to depreciate against the euro if
a. the exchange rate falls. Other things the same, it will cost fewer euros to buy U.S. goods. b. the exchange rate falls. Other things the same, it will cost more euros to buy U.S. goods. c. the exchange rate rises. Other things the same, it will cost fewer euros to buy U.S. goods. d. the exchange rate rises. Other things the same, it will cost more euros to buy U.S. goods.
Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run equilibrium, and that the price of each candy cane is $0.10. Now suppose that the price of sugar rises, increasing the marginal and average total cost of producing candy canes by $0.05; there are no other changes in production costs. Based on the information given, we can conclude that in the long run we will observe:
Select one: A. neither entry nor exit from the industry. B. firms leaving the industry. C. firms entering the industry. D. some firms entering and some firms leaving.