A profit-maximizing monopolistically competitive firm produces and sells an allocatively efficient quantity of output

The horizontal short-run aggregate supply curve

A) assumes that wages and all other input prices are constant. B) assumes that opportunity cost is constant. C) shows that real GDP can be increased only when prices increase. D) assumes that there is full employment in the economy.

Tools to help solve the adverse selection problem in financial markets include all of the following EXCEPT

A) diversification. B) government regulations to increase information. C) the use of financial intermediaries. D) the private production and sale of information.