Incentives can be used to reduce both adverse selection and moral hazard.
Answer the following statement true (T) or false (F)
True
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When demand for a product increases,
A) suppliers change their plans. B) demanders change their plans. C) the price changes. D) all of the above occur. E) none of the above occur.
The difference between economic profit and accountant’s definition of profit is that an economist’s total cost counts the ____ of inputs.
A. absolute value B. overheads C. opportunity cost D. gross cost
What is an efficient tax system? What rules promote efficiency?
What will be an ideal response?
Which of the following is the best example of "depreciation"?
A) An individual worker becoming tired at the end of an eight-hour work day. B) The notion that individuals obtain less utility from paying taxes than giving to charities. C) A truck used by a pizzeria to make deliveries is worth less at the end of one year. D) A rise in prices depreciating the value of consumers' real incomes.