Information asymmetry is present when:
A. there is risk.
B. one person knows more than another.
C. when both parties are lacking the same information.
D. All of these statements are true.
Answer: B
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If Canada began to export maple syrup to Australia, which of the following will happen?
a. The price of maple syrup in Australia will increase and Australian consumers will be made worse off. b. The price of maple syrup in Australia will decrease and the Australian consumers will be made better off. c. The price of maple syrup in Canada will decrease and the Canadian consumers will be made better off. d. The price of maple syrup in Canada will increase and the Canadian consumer will be made worse off. e. The price of maple syrup in Canada will decrease and the Canadian consumer will be made worse off.
Identify the externality that arises when basic research leads to new general knowledge. Is the externality positive or negative?
In 2006, McDonald's introduced the "Snack Wrap" and it turned out to be a successful product. In the marketplace for fast-food products, this success would be an example of:
A. derived demand. B. roundabout production. C. medium of exchange. D. consumer sovereignty.
The Wax Works sells 500 candles at a price of $10 per candle. The Wax Works? total economic costs for producing 500 candles are $2,000. The Wax Works? economic profit is
A. $2,000. B. $3,000. C. $5,000. D. indeterminate from this information.