A manufacturer of light bulbs sells its products to retail stores and requires the stores to sell the bulbs to customers for $2 per bulb. This practice is known as tying
a. True
b. False
Indicate whether the statement is true or false
False
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Insurance companies are not permitted to require AIDS tests as a precondition for coverage, so they do not know whether or not the people they insure have already contracted HIV (the virus that causes AIDS). This situation is an example of
a. signaling. b. adverse selection. c. the principal-agent problem. d. moral hazard.
The role of the entrepreneur in society is to
A. regulate what products are considered safe to market. B. provide capital to the firm which the management combines with labor. C. control the land upon which all production takes place to get the most rent. D. bring the factors of production together and take the risks of producing.
The game in Scenario 13.14
A) is Stackelberg if both players move at the same time; Cournot if one player moves first. B) is Cournot if both players move at the same time; Stackelberg if one player moves first. C) Stackelberg no matter what the timing of moves. D) Cournot no matter what the timing of moves. E) is neither Stackelberg nor Cournot.
Fixed exchange rates are determined in free markets by the forces of demand and supply
a. True b. False Indicate whether the statement is true or false