The most important reason for why some people have higher incomes than others is
A. employment discrimination.
B. differences in wages and salaries.
C. property income.
D. government transfer payments.
B. differences in wages and salaries.
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In the textual example, Muhammad Yunus was highly successful in his use of applying social incentives through group responsibility in order to maximize loan repayment rates. This success created an incentive for other banks to:
A. offer similar loans to the poor. B. go out of business. C. seek government action to ban group responsibility lending. D. avoid catering to a high risk group.
Financial intermediaries
A. Always allocate funds to the least productive investments. B. Transfer purchasing power from spenders to savers. C. Spread the risk of investment failure over many individuals. D. Increase search and information costs for savers and investors.
A result of a positive externality in the production of a good is that
A. the price system will over-allocate resources to the production of that good or service. B. the market demand will be too high. C. the price system will under-allocate resources to the production of that good or service. D. the market supply will be too high.
Which of the following statements about competition in a market is true?
A) Competition forces firms to outsource the production of their labor-intensive products. B) Competition forces firms to undercut their selling price, thus benefiting consumers who will be able to purchase products at the lowest price possible. C) Competition forces firms to produce and sell products as long as the marginal benefit to consumers exceeds the marginal cost of production. D) Competition forces firms to add only low profit margins to their costs of production.