Two common economic problems that may arise from asymmetric information are:
A. moral hazard and adverse decisions.
B. moral consequence and adverse decisions.
C. moral consequence and adverse selection.
D. moral hazard and adverse selection.
Answer: D
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Bill uses his entire budget to purchase Pepsi and hamburgers, and he currently purchases no Pepsi and 6 hamburgers per week
The price of Pepsi is $1 per can, the price of a hamburger is $2, Bill's marginal utility from Pepsi is 2, and his marginal utility from hamburgers is 6. Is Bill's current consumption decision optimal? A) No, he should increase Pepsi consumption and reduce hamburger consumption. B) No, he should purchase more of both goods. C) Yes, the corner solution is best because his MRS is less than the price ratio. D) We do not have enough information to answer this question.
Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000 . What is the marginal tax rate when income is $60,000?
a. 10 percent b. 20 percent c. 30 percent d. 50 percent
In the product market, who is making the payments?
a. households b. firms c. governments d. producers
What is the total benefit associated with producing four units of the control variable, Q (identify point A in the table)?Control variableTotal BenefitsTotal CostsNet BenefitsMarginal BenefitMarginal CostMarginal Net BenefitQB(Q)C(Q)N(Q)MB(Q)MC(Q)MNB(Q)0000---190010080090010080021,700300C80020060032,4006001,800700E4004A1,0002,00060040020053,5001,5002,000500500F63,9002,1001,800D600-20074,2002,8001,400300700-40084,400B800200800-60094,5004,5000100900-800104,5005,500-1,00001,000-1,000
A. 600 B. 2,600 C. 3,400 D. 3,000