When the government hires people to serve in the army, these people are no longer available to do other work. This choice illustrates the concept of

Find the efficient level of abatement.

Suppose that the benefits and costs of water quality policy have been estimated as follows: MSB = 40 – 0.8A MSC = 10 + 0.2A TSB = 40A – 0.4A2 TSC = 10A + 0.1A2, where A is the percentage of pollution abatement and the benefits and costs are measured in thousands of dollars.

Which of the following is not an example of the efforts to reduce the adverse selection problem?

A. Sellers offer warranties. B. Consumers invest in information. C. Sellers offer money-back guarantees. D. All of these are examples of efforts to reduce adverse selection.