Many professional sports athletes have incentive clauses in their contracts. These indicate that
A) the team owner has asymmetric information.
B) the athlete might engage in moral hazard, which the team owner wishes to avoid.
C) the athlete might engage in adverse selection, which the team owner wishes to avoid.
D) the athlete has stronger negotiators.
B
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A graph is a
a. lengthy, inefficient, and inconvenient way to illustrate information b. diagram illustrating a relationship between variables c. method of proving causation d. tool for incorporating all major and minor variables in one illustration e. clear way to see how the fallacy of composition works
For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that
a. an import quota has no effect on consumer surplus, while a tariff decreases consumer surplus. b. an import quota has no effect on producer surplus, while a tariff decreases producer surplus. c. a tariff raises total surplus, while an import quota does not. d. a tariff raises revenue for that country's government, while an import quota does not.
On car insurance policies, Countrywide Insurance Company offers drivers an option: Policy 1 features a deductible of $1,000, and it requires a driver to pay an annual premium of $500 . Policy 2 features a deductible of $250, and it requires a driver to pay an annual premium of $1,000
a. In offering these two policies, Countrywide is engaging in illegal price discrimination. b. In offering these two policies, Countrywide is screening drivers. c. Policy 1 is more of a burden for safe drivers than it is for risky drivers. d. In offering these two policies, Countrywide is signaling their quality to drivers.
The elasticity of labor supply:
A. for a town should equal the elasticity of labor supply for a state. B. should be greater for a state than for a town because people can travel more easily between states than between towns. C. should be greater for a town than for a state because people are more likely to consider work in a neighboring town than in another state. D. for a town is not related to the elasticity of labor supply for a state.