Adverse selection can occur when
A) all persons involved in a transaction have full information.
B) one person has information not available to others.
C) post-agreement incentives result in workers shirking.
D) nobody has any information about a particular product.
B
You might also like to view...
If the employer is only permitted to hire members of the labor union, the workplace is called a(n)
a. closed shop b. collective shop c. agency shop d. union shop e. open shop
Economic analysis indicates that the monetary policy of the 1930s, which shifted back and forth between restrictive monetary policy and expansionary monetary policy, would likely result in
a. economic stability and growth in real levels of output. b. keeping the general level of prices relatively stable because the periods of restrictive policy would just offset the periods of expansion. c. an environment of uncertainty, which would lead to economic instability. d. economic stability, because changes in monetary policy can be counted on to exert a predictable impact on the economy quickly.
The government can raise tax revenue and increase total economic surplus by taxing:
A. goods that generate positive externalities. B. goods whose supply and demand curves are highly elastic. C. luxury goods that are primarily consumed by wealthy individuals. D. goods that generate negative externalities.
The principal of a loan is the:
A. set of rules and conditions borrowers agree to when taking out a loan. B. original amount of the loan. C. set of rules and conditions savers agree to when agreeing to let someone borrow their money. D. original amount that people want to borrow.