Moral hazard and adverse selection are the result of ________
A) prudential supervision
B) any and all government policy
C) excessive price fluctuations
D) asymmetries of information
D
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Much of the research on the minimum efficient scale suggests that for many firms, economies of scale are:
A) relatively modest. B) nonexistent. C) substantial. D) heavily dependent on the minimum efficient scale of the firm's production process.
What is "moral hazard"?
What will be an ideal response?
If the favorable supply shocks of the 1990s were reversed in the future, we should expect a(n)
a. increase in inflation and unemployment. b. decrease in inflation and unemployment. c. increase in inflation and a decrease in unemployment. d. decrease in inflation and an increase in unemployment.
Which of the following statements is true?
A. A vertical merger is a merger of firms that compete in the same market. B. The rule of reason doctrine declares that the existence of monopoly alone is illegal. C. Government regulation is economically justifiable for a natural monopoly. D. Deficient information on unsafe products causes underconsumption.