Lenders generally want borrowers to agree to invest prudently, yet once a loan is made borrowers may use the funds in a highly risky fashion. This leads to the problem of
A. deposit insurance.
B. moral hazard.
C. critical mass.
D. investor selection.
Answer: B
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Which of the following increases the quantity supplied of compact discs but does NOT increase the supply of compact discs?
A) new technology that lowers the cost of producing compact discs B) a decrease in the price of a compact disc C) an increase in the price of a compact disc D) a decrease in the number of suppliers of compact discs E) an increase in the price of the resources used to produce compact discs
Assuming price elasticity of demand is reported as an absolute value, a good with unit elastic demand has an elasticity:
A. less than one, but greater than zero. B. greater than one. C. between zero and one. D. equal to one.
A U.S. family flies from Boston to Shanghai on a China Airlines plane. This transaction is
A. considered an export of service in the U.S balance of payment accounts. B. a deficit item in the balance of payment accounts of China. C. Both of these are correct. D. none of these.
In the absence of government intervention, the marginal social cost of pollution abatement would equal its marginal social benefit
a. True b. False