The inability to monitor the risky behaviors of people creates the ______.
a. moral hazard
b. lemon problem
c. tragedy of the commons
d. adverse selection
a. moral hazard
You might also like to view...
The pollution created when coal is burned by utilities to generate electricity is an example of ________
A) a marginal benefit to coal producers B) a welfare cost C) an external cost D) a cost paid by the utilities
The challenge for economists in the early postwar period was to develop a consumption hypothesis that could explain how
A) the saving ratio could remain fairly constant across income groups while the aggregate saving ratio increased over time as average real income grew. B) the saving ratio for high-income families could be lower than for low-income families while the aggregate saving ratio remained fairly constant over time as average real income grew. C) the saving ratio for high-income families could be higher than for low-income families while the aggregate saving ratio remained fairly constant over time as average real income grew.
When the price and output decisions of one firm include the possible price and output reactions of the firm's rivals, the market is
A. a monopoly characterized by differentiated products. B. an oligopoly characterized by mutual interdependence. C. perfectly competitive characterized by collusion. D. monopolistically competitive characterized by nonprice competition.
How does the inability of foreign investors to repatriate profits impact a developing economy?
A. It fosters corruption. B. It inhibits government control of its economy. C. It harms a countries ability to construct infrastructure. D. It inhibits foreign investment.