__________ occurs because firm owners have an incentive to understate their true riskiness to borrow on a more favorable basis
A) Moral hazard
B) Adverse selection
C) Manager-stockholder conflict
D) Manager-lender conflict
B
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If the game in Scenario 13.17 were to be infinitely repeated, waging a price war might be a rational strategy
A) because there would be no short-term losses. B) because the short-term losses might be outweighed by long-term gains from preventing entry. C) if the potential entrant were irrational. D) if the monopolist had excess capacity. E) if there were no sunk costs to the potential entrant.
If all actions are known to all then there is
A) a focused economy. B) a negative externality. C) transparency. D) a dictatorship.
When a variable that is not named on either axis of a graph changes, we read the change as a movement along the curve
a. True b. False Indicate whether the statement is true or false
Refer to the information provided in Figure 23.3 below to answer the question(s) that follow.
Figure 23.3Refer to Figure 23.3. For this society, aggregate saving is ________ if aggregate income is above $200.
A. equal to aggregate consumption B. zero C. negative D. positive