Asymmetric information in a transaction can result in:
A. moral hazard.
B. adverse selection.
C. a lemons problem.
D. All of these statements are true.
D. All of these statements are true.
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The benefit estimation method that uses surveys about hypothetical market conditions is
a. the averting expenditure method c. the travel cost approach b. the contingent valuation method d. the political referendum approach
The fundamental identity of national income accounting implies ________
A) Expenditure = Production + Income B) Expenditure = Production = Income C) Income = Expenditure - Production D) Income = Expenditure / Production E) None of the above
If the demand increases in a perfectly competitive market, firms will likely:
A. set prices artificially higher permanently. B. have to engage in more advertising in order to further stimulate the increase in demand. C. enter the market in hopes of capturing some profits. D. experience a loss due to increased competition.
How much is this firm's total loss?
