Adverse selection and moral hazard are two different terms that mean essentially the same thing.

Suppose the short-run price elasticity of demand for airline travel is 0.50, while its long- run elasticity is 2.50 . This means that for 100 short-notice travelers compared to 100 travelers who book well in advance, a significant increase in airline fares now will cause airlines to

a. collect less revenue from the short-notice travelers than from the travelers who book well in advance b. gain travelers who book well in advance but lose short-notice travelers c. lose more revenue from short-notice travelers than from travelers who book well in advance d. collect less revenue from the travelers who book well in advance than from the short-notice travelers e. lose more short-notice travelers than travelers who book well in advance

What should happen to the equilibrium interest rate and the corresponding rate of investment if the Fed decreases the discount rate?

A. The equilibrium interest rate and the equilibrium rate of investment should both decrease. B. The equilibrium interest rate and the equilibrium rate of investment should both increase. C. The equilibrium interest rate should decrease, and the equilibrium rate of investment should increase. D. The equilibrium interest rate should increase, and the equilibrium rate of investment should decrease.