The above figure presents the view of the economy according to
A) Keynesian economics.
B) classical economics.
C) microanalysis.
D) Ricardian economics.
A
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Which of the following occurs when party A would like to change his behavior if party B would change hers, and vice versa, and yet the two changes do not take place because the decisions of A and B are made independently?
a. Moral hazard b. Coordination failure c. Leakage d. Lemon problem
Employers can try to overcome the moral-hazard problem involving their employees by
a. paying their employees more often. b. paying their employees below-equilibrium wages since the employees will likely shirk some of their responsibilities. c. better monitoring their employees' work efforts. d. requiring their employees to take a pre-employment work effort test.
The "independence of irrelevant alternatives" criterion is also known as the:
A. third-party problem. B. swing-vote problem. C. majority options problem. D. misalignment problem.
The process of marking to market:
A. involves the margin accounts of only the sellers of future contracts. B. is done by the clearing corporation to reduce risk in futures contracts. C. involves the margin accounts of only the buyers of future contracts. D. usually requires margin accounts to be adjusted weekly by the clearing corporation.