Owners of defective used cars have more information about the condition of their vehicles than potential buyers of those used cars. This is an example of:
A. the moral hazard problem.
B. a spillover cost.
C. a positive externality.
D. asymmetric information.
Answer: D
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A monopolistically competitive firm faces a downward-sloping demand curve because
A) of product differentiation. B) its market decisions are affected by the decisions of its rivals. C) it is able to control price and quantity demanded. D) there are few substitutes for its product.
The ability of a firm to maintain a price above the competitive level without losing all its customers to rival firms is termed as ________
a. competition b. marginal cost pricing c. allocative efficiency d. market power
When the small home nation imposes a tariff of $10, the domestic price:
a. rises by more than $10. b. rises by $10. c. rises by less than $10. d. does not change.
Given total cost and the quantity of output, marginal cost and average cost can be determined.
Answer the following statement true (T) or false (F)