The practice of potential buyers offering lower prices for a product of uncertain quality than they would for a product of certain quality is known as:
a. the lemon problem.
b. moral hazard

A. What are the two effects of an increase in the wage rate on an individual's labor supply decision? Briefly explain each effect

b. Explain how a labor supply curve could be backward bending. What will be an ideal response?

In an oligopoly, advertising: a. allows a firm to sell any quantity it wishes

b. shapes consumers' preferences. c. shapes perceived demand for a price taker. d. allows a firm to raise the prevailing market price.