An area of economics that explores how contract or transaction structures can overcome asymmetric information problems is
A. econometrics.
B. adverse selection.
C. behavioral economics.
D. mechanism design.
Answer: D
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Innovation typically increases when
A) high taxes are present. B) the legal system is weak. C) government controls the resource base. D) market incentives and private property rights are encouraged.
Which of the following about Social Security is true?
a. All of the current revenues flowing into the Social Security system are needed for benefit payments to current retirees. b. If the Social Security surplus was used to pay down the privately held federal debt, this would reduce future taxes and, thereby, make it easier to deal with the retirement of the baby boomers. c. During the 1980s and 1990s, most of the social security surplus was used to reduce the national debt. d. When the Social Security surplus is used to cover the current operating expenses of the federal government, it will make it easier for future taxpayers to provide promised Social Security benefits to baby boomers.
When every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it, ________ occurs
A) allocative efficiency B) productive efficiency C) equity D) efficient central planning
The Lawn Ranger, a landscaping company, has total costs of $5,000 and total variable costs of $1,000. The Lawn Ranger's total fixed costs are
A. $0. B. $4,000. C. $6,000. D. indeterminate because the firm's output level is unknown.