The possibility for recipients of funds in foreign countries to engage in riskier behavior after receiving financing is called
A) inequitable financing.
B) moral hazard.
C) adverse selection.
D) asymmetric information.
B
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If bad credit risks are the ones who most actively seek loans then financial intermediaries face the problem of
A) moral hazard. B) adverse selection. C) free-riding. D) costly state verification.
A monopoly incurs a marginal cost of $1 for each unit produced. If the price elasticity of demand equals -2.0, the monopoly maximizes profit by charging a price of
A) $1.00. B) $1.50. C) $2.00. D) $3.00.
According to the textbook application, product remanufacturing
a. begins with the collection of used products b. involves the dismantling of used products c. comprises a small market of less than $5 million in revenues d. none of the above e. (a) and (b) only
The slope of the consumption function equals the marginal propensity to consume.
a. true b. false