When applying for a loan, a borrower tends to know more about her ability to pay it back than does the bank. This is an example of
a. perfect information
b. moral hazard
c. a low marginal benefit of information for the bank
d. asymmetric information
e. optimal search
D
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Suppose you want to maximize your total utility. If your marginal utility per dollar spent is higher for one good than for all others, then you should:
A. spend more on all goods. B. reallocate your spending away from that good. C. reallocate your spending towards that good. D. spend less on all goods.
One of the most significant factors causing the recession of 2007-2009 was
A. very low interest rates maintained by the Federal Reserve. B. the bursting of the housing bubble. C. the huge federal government budget surplus. D. very low, crude oil prices.
A kinked demand curve is perceived by the firm as being:
a. more elastic to the right of the kink b. more inelastic to the right of the kink c. more inelastic to the left of the kink d. present when there is a monopoly e. bowed-in or bowed-out
What factors must countries with different income levels and political preferences balance when determining the allocative efficiency of environmental regulations?
a. Economic output versus environmental protection b. Marginal costs versus productive efficiency c. Productive efficiency versus unproductive inefficiency d. The value of the past versus the value of the present