Which of the following problems are created by an information asymmetry
a. Moral hazard
b. Adverse selection
c. Both of the above
d. None of the above
c
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Refer to the Article Summary. All else equal, a depreciation of the Chinese yuan relative to a currency such as the U.S. dollar should ________ Chinese exports and ________ imports to China
A) decrease; decrease B) decrease; increase C) increase; increase D) increase; decrease
A small business owner earns $50,000 in revenue annually. The explicit annual costs equal $30,000. The owner could work for someone else and earn $25,000 annually. The owner's business profit is ________ and the economic profit is ________
A) $20,000, $20,000 B) $20,000, -$5,000 C) $25,000, -$5,000 D) $25,000, $20,000
If the firm learns that the complicated technology can be made more stable with a few tweaks increasing the cost by 5.5million and increasing the probability of a launch to 50%. Is it worth for the firm to invest the $500,000 in tweaks?
a. No, because it decreases the total expected value b. Yes, because it increases expected value c. No, because it increases risk d. Yes, because tweaking is good
In recent years, people have benefited from greater amounts of leisure time. This trend:
a. has caused GDP to rise. b. has caused GDP to fall. c. made GDP fluctuate randomly. d. is not accounted for in GDP.