Of the four countries below, which has the highest degree of income inequality?
a. Germany
b. Turkey
c. South Africa
d. Mexico
c
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A perfectly competitive furniture-rental firm in Phoenix incurs an economic loss if the average total cost of each rental is
A) greater than the marginal revenue of each rental. B) less than the marginal revenue of each rental. C) equal to the marginal revenue of each rental. D) equal to the price of each rental. E) greater than the average variable cost of each rental.
Moral hazard is
A) the tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party. B) when one of the parties to an agreement has an incentive after the agreement is made to act in a manner that brings additional benefits to himself or herself at the expense of the other party. C) a situation in which only bad quality items are bought and sold. D) an action taken outside a market that conveys information that can be used by that market.
If a farmer's opportunity cost of producing 10,000 bushels of wheat is 5,000 fewer bushels of soybeans, then her opportunity cost of producing 5,000 bushels of soybeans must be 10,000 fewer bushels of wheat
a. True b. False Indicate whether the statement is true or false
Which of the following is a common criticism of the use of fiscal policy?
A) Fiscal policy is often enacted too quickly, before the market is ready for it. B) A government borrowing money to finance fiscal policy can crowd out investments. C) Expansionary fiscal policy can help pull an economy out of a recession. D) If no fiscal policy is used, the economy will never be able to correct itself, even partially.