Moral hazard is a problem that arises:
A. before the parties have entered into an agreement.
B. rarely in any market.
C. either before or after the parties have entered into an agreement.
D. after the parties have voluntarily entered into an agreement.
Answer: D
You might also like to view...
In 2014, the price of peanuts was rising, which lead peanut butter sellers and peanut butter buyers to expect the price of peanut butter would rise in the future. In the current market for peanut butter, the price rises and the quantity increases
This set of results means that A) demand increased by more than supply decreased. B) supply decreased by more than demand increased. C) demand increased by more than supply increased. D) supply decreased by more than demand decreased.
Assume the supply curve for cigars is a typical, upward-sloping straight line, and the demand curve for cigars is a typical, downward-sloping straight line. Suppose the equilibrium quantity in the market for cigars is 1,000 per month when there is no tax. Then a tax of $0.50 per cigar is imposed. The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by
sellers falls from $1.50 to $1.40 . The government's tax revenue amounts to $475 per month. Which of the following statements is correct? a. The demand for cigars is less elastic than the supply of cigars. b. The tax causes a decrease in consumer surplus of $390 and a decrease in producer surplus of $97.50. c. The deadweight loss of the tax is $12.50. d. All of the above are correct.
The pollution emitted by a power plant is an example of a detrimental externality.
Answer the following statement true (T) or false (F)
The higher the interest rate, the greater the:
A. Both present value and net present value are correct. B. Neither present value nor net present value is correct. C. present value. D. net present value.