The potential for asymmetric information to bring about a general decline in product quality in an industry is known as the ________ problem.
A. moral hazard
B. capture
C. lemons
D. liability
Answer: C
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The velocity of M2 is equal to
A) M3 minus M1. B) GDP divided by M2. C) GDP multiplied by M2. D) the velocity of M1.
Scarcity means
A) wants are greater than the limited resources available to satisfy these wants. B) wants are less than the limited resources available to satisfy these wants. C) resources are infinite. D) wants are limited. E) both c and d
The figure above represents the relationship between output and cost in an industry with an external cost. When output is at D, what distance represents the marginal external cost?
A) AB B) BC C) CD D) BD E) None of the above answers is correct.
If the absolute value of the price elasticity of demand for aspirin equals 0.8 then
A) aspirin has few substitutes. B) the demand for aspirin is elastic. C) the demand for aspirin is inelastic. D) aspirin is a normal good.