The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is
A) inefficient market hypothesis.
B) moral hazard.
C) information disparity.
D) asymmetric information.
Answer: D
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The table below shows data (in millions) for Sun Trust Banks in September 2007 and September 2008. Suppose that the required reserve ratio is 3 percent
2007 2008 Loans $83 $78 Reserves $4 $5 Deposits $114 $95 The data show that Sun Trust ________ make more loans in 2007 and ________ make more loans in 2008. A) can; can B) can; cannot C) cannot; cannot D) cannot; can
Suppose the value of price elasticity of demand for goods manufactured by firms A, B, C, and D are 0, -0.8, -1, and -1.5 respectively. The demand for the good will be elastic for:
a. firms A, B, C, and D. b. firms B, C, and D. c. only firm A. d. firms C and D only. e. only firm D.
In the absence of trade barriers, patterns of trade are driven by comparative advantage.
a. true b. false
Perfectly competitive firms produce up to the point where the price of the good equals the marginal cost of producing the last unit. This condition is referred to as
A) productive efficiency. B) constant returns to scale. C) allocative efficiency. D) perfectly competitive efficiency.