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Incentives can be used to reduce both adverse selection and moral hazard.
Incentives can be used to reduce both adverse selection and moral hazard.
Question 1.Most of the interest in using incentives arises due to uncertainty.

▸ true

▸ falseQuestion 2.Incentives can be used to reduce both adverse selection and moral hazard.

▸ true

▸ false
Economics   wrightjb   11   Woo   3 weeks ago
Why, in the labor market, are contracts often designed to include a variable salary component that ...
Why, in the labor market, are contracts often designed to include a variable salary component that ...
[html]Why, in the labor market, are contracts often designed to include a variable salary component that is tied to some measure of performance?

▸ Such contracts are considered the fairest to employees under fair labor standard laws.

▸ Most people are risk-averse and thus variability in their compensation leads to higher total utility.

▸ Firms use such contracts to differe
Economics   parneetgill   9   3   christinaalex   3 weeks ago
An area of economics that explores how contract or transaction structures can overcome asymmetric ...
An area of economics that explores how contract or transaction structures can overcome asymmetric ...
[html]Question 1.Refer to the Economics in Practice on page 358. Sometimes the lack of information in an advertisement serves as a signal.

▸ true

▸ falseQuestion 2.An area of economics that explores how contract or transaction structures can overcome asymmetric information problems is

▸ behavioral economics.
Economics   coolcat   8   rinderbik   3 weeks ago
Jacinda, a college student, waits tables at a local diner to earn extra cash. In order to ...
Jacinda, a college student, waits tables at a local diner to earn extra cash. In order to ...
[html]Question 1.The insurance industry is susceptible to moral hazard problems, but not problems of adverse selection.

▸ true

▸ falseQuestion 2.Jacinda, a college student, waits tables at a local diner to earn extra cash. In order to differentiate herself from other wait staff, Jacinda took a life saving course f
Economics   meikunn2565   11   3   abonaccorso1   3 weeks ago
Moral hazard can do harm to one party to a contract, but always results in efficient behavior.
Moral hazard can do harm to one party to a contract, but always results in efficient behavior.
Question 1.Moral hazard occurs when buyers and sellers take actions to communicate quality in a world of uncertainty.

▸ true

▸ falseQuestion 2.Moral hazard can do harm to one party to a contract, but always results in efficient behavior.

▸ true

▸ false
Economics   emlaai   15   kwashington67   3 weeks ago
Annie, a high school student, babysits to earn extra cash. In order to differentiate herself from ...
Annie, a high school student, babysits to earn extra cash. In order to differentiate herself from ...
[html]Question 1.Which of the following are examples of market signals?

▸ warranties

▸ education

▸ extracurricular activities

▸ All of theseQuestion 2.Annie, a high school student, babysits to earn extra cash. In order to differentiate herself from other babysitters, Annie took a babysitting course from the Red
Economics   lmalma   16   3   getdh   3 weeks ago
A credit union faces a(n) ________ problem when it lends funds to a customer to remodel her home and ...
A credit union faces a(n) ________ problem when it lends funds to a customer to remodel her home and ...
[html]Question 1.An automobile finance company faces an adverse selection problem if borrowers

▸ with a greater chance of defaulting on their car loans get loans from the lender.

▸ with no chance of defaulting on their car loans get loans from the lender.

▸ choose to get their car loans from a source other than the finance company.

▸ choose a 5-yea
Economics   nursemegan   11   rinderbik   3 weeks ago
You cause a fire insurance company to face a moral hazard problem when you take ________ you buy ...
You cause a fire insurance company to face a moral hazard problem when you take ________ you buy ...
[html]Question 1.Buyers and sellers use ________ to communicate the quality of goods and services in a world of uncertainty.

▸ asymmetric information

▸ market signals

▸ expected value

▸ moral hazardsQuestion 2.You cause a fire insurance company to face a moral hazard problem when you take ________ you buy fire i
Economics   tlc_71111   13   3   amw87470   3 weeks ago
In the market for used electric wheelchairs, there are high- and low-quality wheelchairs. Potential ...
In the market for used electric wheelchairs, there are high- and low-quality wheelchairs. Potential ...
[html]Question 1.Which of the following are examples of tools used to reduce adverse selection?

▸ universal health coverage

▸ dealer warranties

▸ lemon laws

▸ All of theseQuestion 2.In the market for used electric wheelchairs, there are high- and low-quality wheelchairs. Potential buyers cannot determine prior t
Economics   mdagenh1   11   meigsfla   3 weeks ago
You are in the market for a used 2013 Toyota Corolla. You know that half of the 2013 Corollas are ...
You are in the market for a used 2013 Toyota Corolla. You know that half of the 2013 Corollas are ...
[html]Question 1.Adverse selection and moral hazard arise because of

▸ asymmetric information.

▸ selection problems.

▸ risk aversion.

▸ mechanism designs for dealing with informational problems.Question 2.You are in the market for a used 2013 Toyota Corolla. You know that half of the 2013 Corollas are lemons and
Economics   michlee   13   3   Dogggg   3 weeks ago
With ________, the quality of what is being offered in a transaction matters and is not easily demonstrated.
With ________, the quality of what is being offered in a transaction matters and is not easily demonstrated.
[html]Question 1.If a monopolistically competitive industry is earning short-run profits, new competitors will enter the industry in the long run and compete away those profits.

▸ true

▸ falseQuestion 2.With ________, the quality of what is being offered in a transaction matters and is not easily demonstrated.
Economics   dillon_green23   8   yesimshay   3 weeks ago
For a monopolistically competitive firm, its demand curve is the same as its marginal revenue curve.
For a monopolistically competitive firm, its demand curve is the same as its marginal revenue curve.
[html]Question 1.When monopolistically competitive firms earn ________ profits, other firms ________ the industry in the long run.

▸ positive economic; exit

▸ normal; enter

▸ negative economic; exit

▸ normal; exitQuestion 2.For a monopolistically competitive firm, its demand curve is the same as its marginal rev
Economics   wrightjb   10   3   emr21   3 weeks ago
Monopolistically competitive firms ________ because in long-run equilibrium price is ________ marginal cost.
Monopolistically competitive firms ________ because in long-run equilibrium price is ________ marginal cost.
[html]Question 1.In ________ monopolistically competitive equilibrium, there will be neither economic profits nor losses.

▸ short-run

▸ long-run

▸ both short-run and long-run

▸ neither short-run nor long-runQuestion 2.Monopolistically competitive firms ________ because in long-run equilibrium price is ________ m
Economics   autumnnelson123   17   emnevius   3 weeks ago
For a monopolistically competitive firm ________ at the profit-maximizing quantity, the demand curve ...
For a monopolistically competitive firm ________ at the profit-maximizing quantity, the demand curve ...
[html]Question 1.As firms ________ a monopolistically competitive industry the demand and marginal revenue curves facing each firm begin to shift to the ________.

▸ expand in; right

▸ exit; left

▸ exit; right

▸ enter; rightQuestion 2.For a monopolistically competitive firm ________ at the profit-maximizing quant
Economics   caillacakes   12   3   kwashington67   3 weeks ago
Samurai Sam's, a producer of frozen sushi, is a monopolistically competitive firm. The firm is ...
Samurai Sam's, a producer of frozen sushi, is a monopolistically competitive firm. The firm is ...
[html]Question 1.To maximize profit, a ________ firm will produce where marginal revenue equals marginal cost.

▸ monopolistically competitive

▸ perfectly competitive

▸ monopolistic

▸ All of these are correct.Question 2.Samurai Sam's, a producer of frozen sushi, is a monopolistically competitive firm. The firm is
Economics   meganA   7   n00835996   3 weeks ago
In the long run, a monopolistically competitive firm that is incurring a loss will ________ if total ...
In the long run, a monopolistically competitive firm that is incurring a loss will ________ if total ...
[html]Question 1.A monopolistically competitive firm ________ where marginal revenue equals marginal cost.

▸ minimizes average total cost

▸ maximizes revenues

▸ minimizes average variable cost

▸ maximizes profitsQuestion 2.In the long run, a monopolistically competitive firm that is incurring a loss will _______
Economics   rizumidancer   13   2   3 weeks ago
Speedy Flowers competes in the monopolistically competitive flower delivery industry in a city. The ...
Speedy Flowers competes in the monopolistically competitive flower delivery industry in a city. The ...
[html]Speedy Flowers competes in the monopolistically competitive flower delivery industry in a city. The firm raises its prices by 5% while all other florists keep their prices the same. Which of the following is most likely to occur? Speedy Flowers will

▸ be unable to sell any flowers because it was the only firm to raise price.

▸ lose some of its customers.

▸ increase i
Economics   achalmers   11   kirakira15   3 weeks ago
A profit-maximizing firm in a ________ market structure behaves much like a monopolistic firm in the ...
A profit-maximizing firm in a ________ market structure behaves much like a monopolistic firm in the ...
[html]Question 1.Unlike a monopolistically competitive firm's product, a monopolistic firm's product

▸ is homogeneous.

▸ has a vertical demand curve.

▸ has many close substitutes.

▸ has no close substitutes.Question 2.A profit-maximizing firm in a ________ market structure behaves much like a monopolistic firm i
Economics   lurielbank   13   2   3 weeks ago
In longrun equilibrium for a monopolistically competitive industry, ________ firms earn ________ ...
In longrun equilibrium for a monopolistically competitive industry, ________ firms earn ________ ...
[html]Question 1.In long-run monopolistically competitive equilibrium, there can be

▸ economic profits, but not losses.

▸ economic profits or losses.

▸ no economic profits, but losses.

▸ neither economic profits nor losses.Question 2.In long‐run equilibrium for a monopolistically competitive industry, ________ f
Economics   trancy   12   kwashington67   3 weeks ago
The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its ...
The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its ...
[html]The pizza delivery industry is monopolistically competitive. Little Joe's Pizzeria raises its prices by 10%, but all the other pizzerias in town keep their prices the same. Which of the following is most likely to occur?

▸ Little Joe's Pizzeria will not be able to sell any pizzas, because it was the only firm to raise its price.

▸ Little Joe's Pizzeria will lose some
Economics   unicorngirl13   15   3   johnsyke   3 weeks ago
Unlike a monopolistic firm's product, a monopolistically competitive firm's product
Unlike a monopolistic firm's product, a monopolistically competitive firm's product
[html]Question 1.Apple improves the resolution of its iPhone camera by doubling the number of megapixels. This is an example of vertical differentiation.

▸ true

▸ falseQuestion 2.Unlike a monopolistic firm's product, a monopolistically competitive firm's product

▸ is homogeneous.

▸ is a unique product.

▸ ha
Economics   jacksonfive09   11   osvaldoguzman   3 weeks ago
A chewing gum manufacturer adds a jalapeo-flavored bubble gum to its product mix. This is an example ...
A chewing gum manufacturer adds a jalapeo-flavored bubble gum to its product mix. This is an example ...
Question 1.In well-working markets, any gains from coordination are reflected in the level of product variety.

▸ true

▸ falseQuestion 2.A chewing gum manufacturer adds a jalapeño-flavored bubble gum to its product mix. This is an example of horizontal differentiation.

▸ true

▸ false
Economics   msouthern   14   2   3 weeks ago
In a well-working market, the underlying heterogeneity of consumers' tastes in that market are ...
In a well-working market, the underlying heterogeneity of consumers' tastes in that market are ...
Question 1.In well-working markets, cost economies from standardization are reflected in the level of product variety.

▸ true

▸ falseQuestion 2.In a well-working market, the underlying heterogeneity of consumers' tastes in that market are reflected in the level of product variety.

▸ true

▸ false
Economics   jonnyjon   12   BobbyD   3 weeks ago
The more homogeneous are consumers' preferences, the less product variety will be observed.
The more homogeneous are consumers' preferences, the less product variety will be observed.
[html]Question 1.The case against advertising includes the assertion that advertising

▸ keeps firms from spending huge sums of money to create artificial differences among goods.

▸ provides consumers with valuable information about product availability, quality, and price.

▸ decreases competition by increasing barriers to entry of new firms into an
Economics   linhlinhgn   10   3   Lori734   3 weeks ago
The case for product differentiation includes the assertion that
The case for product differentiation includes the assertion that
[html]Question 1.An action that an individual takes in one period to try to control her behavior in a future period is called

▸ behavioral conditioning.

▸ Pavlovian behavior.

▸ a maximin strategy.

▸ a commitment device.Question 2.The case for product differentiation includes the assertion that

▸ even produc
Economics   Frost   12   aishasu   3 weeks ago
Monopolistically competitive firms can use product differentiation to do which of the following?
Monopolistically competitive firms can use product differentiation to do which of the following?
[html]Question 1.Product differentiation that makes the product ________ is known as vertical differentiation.

▸ more similar to the rival's product

▸ better for some consumers and worse for others

▸ better than a rival's product from everyone's perspective

▸ less expensive to produceQuestion 2.Monopolistically
Economics   billyhilly   11   3   peaceout3000   3 weeks ago
Product differentiation that makes the product ________ is horizontal differentiation.
Product differentiation that makes the product ________ is horizontal differentiation.
[html]Question 1.In well functioning markets, the degree of product variety reflects which of the following?

▸ similar preferences in consumers' tastes

▸ cost diseconomies from standardization

▸ gains from network externalities

▸ gains from coordinationQuestion 2.Product differentiation that makes the product __
Economics   mbowdish   11   ShayT0923   3 weeks ago
The case for advertising includes the idea that
The case for advertising includes the idea that
[html]Question 1.In a monopolistically competitive industry, good product substitutes are available whereas in a monopoly they are not available.

▸ true

▸ falseQuestion 2.The case for advertising includes the idea that

▸ it adds to society's scarce resources.

▸ firms spend large sums of money to create meani
Economics   Gideon123   14   2   3 weeks ago
A monopolistically competitive industry is characterized by having no barriers to entry.
A monopolistically competitive industry is characterized by having no barriers to entry.
Question 1.In monopolistically competitive industries, the market sets the price.

▸ true

▸ falseQuestion 2.A monopolistically competitive industry is characterized by having no barriers to entry.

▸ true

▸ false
Economics   ujesssss   8   anthead   3 weeks ago
Monopolistically competitive firms are like perfectly competitive firms in that they both sell ...
Monopolistically competitive firms are like perfectly competitive firms in that they both sell ...
Question 1.Firms in a monopolistically competitive industry are distinguished by strategic behavior.

▸ true

▸ falseQuestion 2.Monopolistically competitive firms are like perfectly competitive firms in that they both sell homogeneous products.

▸ true

▸ false
Economics   be beautiful   9   2   3 weeks ago
A monopolistically competitive firm influences market price because of product differentiation.
A monopolistically competitive firm influences market price because of product differentiation.
[html]Question 1.________ firms use a product differentiation strategy to achieve market power.

▸ Monopolistically competitive

▸ Monopolistic

▸ Oligopolistic

▸ Perfectly competitiveQuestion 2.A monopolistically competitive firm influences market price because of product differentiation.

▸ true

▸ false[/htm
Economics   linhlinhgn   11   anthead   3 weeks ago
In a(n) ________ industry, firms are small relative to the total market.
In a(n) ________ industry, firms are small relative to the total market.
[html]Question 1.Firms ________ in monopolistic competition due to product differentiation.

▸ have no control over price

▸ have blocked entry

▸ gain control over price

▸ are limited in numberQuestion 2.In a(n) ________ industry, firms are small relative to the total market.

▸ monopolistic

▸ monopolisticall
Economics   mdagenh1   12   3   emnevius   3 weeks ago
Monopolistically competitive firms have ________ market power due to producing differentiated products.
Monopolistically competitive firms have ________ market power due to producing differentiated products.
[html]Question 1.The feature that distinguishes monopolistic competition from monopolies and oligopolies is that monopolistically competitive firms

▸ cannot influence market price by virtue of their size alone.

▸ benefit from barriers to entry.

▸ are price takers.

▸ do not have price as a decision variable.Question 2.
Economics   mbowdish   13   Dogggg   3 weeks ago
In Chicago there are many restaurants. Each restaurant is slightly different from every other ...
In Chicago there are many restaurants. Each restaurant is slightly different from every other ...
[html]Question 1.Perfect competition differs from monopolistic competition primarily because

▸ in perfect competition, firms have homogeneous products.

▸ in perfect competition, price is a decision variable.

▸ in monopolistic competition, entry into the industry is limited.

▸ in monopolistic competition, there are many firms in the industry.
Economics   dfghj   9   2   3 weeks ago
Price is a limited decision variable in which of the following market organizations?
Price is a limited decision variable in which of the following market organizations?
[html]Question 1.Which of the following is a characteristic of monopolistically competitive industries?

▸ significant barriers to entry

▸ strategic behavior

▸ product differentiation

▸ a small number of firmsQuestion 2.Price is a limited decision variable in which of the following market organizations?

▸ pe
Economics   lstar1993   8   sarahlouhigg   3 weeks ago
Industries with an HHI of under 1,000 are considered unconcentrated, and any proposed merger would ...
Industries with an HHI of under 1,000 are considered unconcentrated, and any proposed merger would ...
Question 1.The HHI is calculated by summing the square of the percentage shares of the firms in the market.

▸ true

▸ falseQuestion 2.Industries with an HHI of under 1,000 are considered unconcentrated, and any proposed merger would go unchallenged by the Justice Department.

▸ true

▸ false
Economics   Gideon123   15   3   curtissxx9   3 weeks ago
The government uses the HHI as a guideline to determine which proposed mergers are acceptable.
The government uses the HHI as a guideline to determine which proposed mergers are acceptable.
[html]Question 1.The U.S. beer industry has an HHI of 3,525. If two beer producers propose a merger that would increase the industry HHI by 25 points, then the merger would be challenged based on the change in the HHI.

▸ true

▸ falseQuestion 2.The government uses the HHI as a guideline to determine which proposed
Economics   iloveyofacexx3   11   brigettelearn   3 weeks ago
Industry A has four firms that each control 25 percent of the market. Industry B has six firms, ...
Industry A has four firms that each control 25 percent of the market. Industry B has six firms, ...
[html]Question 1..A pure monopoly has a HHI value of

▸ 1,000.

▸ 5,000.

▸ 10,000.

▸ 100,000.Question 2.Industry A has four firms that each control 25 percent of the market. Industry B has six firms, where one firm controls 50 percent of the market and the other five firms control 10 percent of the market each. Ac
Economics   meikunn2565   9   2   3 weeks ago
If the Herfindahl-Hirschman Index of an industry is greater than 1,800, then the Antitrust Division ...
If the Herfindahl-Hirschman Index of an industry is greater than 1,800, then the Antitrust Division ...
[html]Question 1.The government uses market share figures contained in the ________to help determine whether or not it will challenge a proposed merger.

▸ Herfindahl-Hirschman Index

▸ concentration ratio

▸ Cellar-Kefauver Index

▸ antitrust prohibition ratioQuestion 2.If the Herfindahl-Hirschman Index of an indus
Economics   Lighting2551   6   jackjohnson74   3 weeks ago
________ extended the government's authority to ban vertical and conglomerate mergers.
________ extended the government's authority to ban vertical and conglomerate mergers.
[html]Question 1.The ________ Act extended the government's authority to ban vertical and conglomerate mergers.

▸ Sherman

▸ Clayton

▸ Celler-Kefauver

▸ Federal Trade CommissionQuestion 2.________ extended the government's authority to ban vertical and conglomerate mergers.

▸ The Sherman Antitrust Act of 189
Economics   yuknam   15   3   ShayT0923   3 weeks ago
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