The economic theory of labor markets suggests that wages are determined by labor supply and labor demand
a. True
b. False
Indicate whether the statement is true or false
True
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The European Union established a cap-and-trade system which was designed to
A) eliminate air pollution and greenhouse gases by the year 2020. B) reduce carbon dioxide emissions. C) remove all taxes from polluting industries. D) provide fast growing developing countries with the technology to reduce their carbon emissions.
Which of the following is an example of an externality?
A. The reduction in health risks when Tom’s family receives a measles vaccine B. Robert’s purchase of a new car C. A firm’s investment of new computer technology D. Eric’s choice to buy a new lawn mower
Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas?
What will be an ideal response?
In markets with asymmetric information
A) moral hazard causes adverse selection which in turn causes asymmetric information. B) adverse selection causes moral hazard which in turn causes asymmetric information. C) asymmetric information causes moral hazard and then it causes adverse selection. D) asymmetric information causes adverse selection and then it causes moral hazard.