We say a market is "missing" when:
A. there is no place for potential buyers and sellers to exchange a particular good or service.
B. the quantity being exchanged is at or close to zero.
C. there is an absence of a well-functioning market, and total surplus is lower than it could be.
D. All of these are true.
D. All of these are true.
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If a salesperson is paid by the volume of sales he or she makes, then the
A) moral hazard problem is diminished. B) moral hazard problem is enhanced. C) adverse selection problem is enhanced. D) None of the above answers is correct.
A difference between moral hazard and adverse selection is that
a. moral hazard deals with pre-contractually determined public information b. moral hazard deals with post-contractually determined private information c. adverse selection deals with pre-contractually determined private information d. adverse selection deals with post-contractually determined public information
Purchasing-power parity describes the forces that determine
a. prices in the short run. b. prices in the long run. c. exchange rates in the short run. d. exchange rates in the long run.
If perfectly competitive firms are making an economic profit, then
A) the market is in its long-run equilibrium. B) new firms enter the market and the equilibrium profit of the firms already in the market decreases. C) new firms enter the market and the equilibrium profit of the firms already in the market increases. D) firms exit the market and the economic profit of the surviving firms in the market decreases. E) firms exit the market and the economic profit of the surviving firms in the market increases.