Information asymmetry is present when:
A. one person knows more than another.
B. there is risk.
C. when both parties are lacking the same information.
D. All of these statements are true.
A. one person knows more than another.
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If the market price is less than a perfectly competitive firm's average total cost, what sort of profit or loss is the firm making?
What will be an ideal response?
An indifference curve
A) connects a set of consumption bundles among which the consumer is indifferent. B) is only useful in analyzing apathetic consumers. C) connects a set of consumers who each have the same preferences. D) is only useful in microeconomics.
Suppose an entrepreneur commits to a production schedule but underestimates the market price for his products. What will be true about his current level of production?
a. Losses will be very high. b. Marginal cost will be less than marginal revenue. c. Marginal cost will be more than marginal revenue. d. Average total cost will exceed price. e. Total fixed costs will be too low.
The average variable cost, the average total cost, and the marginal cost start to diminish only after the firm reaches the point of efficient scale
a. True b. False Indicate whether the statement is true or false