During periods of inflation, all prices of all products are rising
a. True
b. False
Indicate whether the statement is true or false
False
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A debt contract is incentive compatible
A) if the borrower has the incentive to behave in the way that the lender expects and desires, since doing otherwise jeopardizes the borrower's net worth in the business. B) if the borrower's net worth is sufficiently low so that the lender's risk of moral hazard is significantly reduced. C) if the debt contract is treated like an equity. D) if the lender has the incentive to behave in the way that the borrower expects and desires.
An increase in the number of consumers in a market would cause
A) an increase in quantity demanded. B) an increase in quantity supplied. C) an increase in demand. D) an increase in supply.
If a monopolist can practice perfect price discrimination, the monopolist will
a. eliminate consumer surplus. b. eliminate deadweight loss. c. maximize profits. d. All of the above are correct.
A price ceiling means that:
A. there is currently a surplus of the relevant product. B. government is imposing a legal price that is typically below the equilibrium price. C. government wants to stop a deflationary spiral. D. government is imposing a legal price that is typically above the equilibrium price.