Acme Widget tells investors it wants to build a new widget factory and sell investors $10,000,000 in bonds to finance it
Once they have raised the $10,000,000 the owners of Acme Widget use the funds to finance a trip to Atlantic City to try out a new scheme they have devised to win at blackjack. This is an example of A) the adverse selection problem in financial markets.
B) the moral hazard problem in financial markets.
C) the difficulty lenders have in distinguishing good from lemon firms.
D) the problems with using rational expectations in financial markets.
B
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In the economic way of thinking, "scarcity" is another way of saying
A) "regret." B) "responsibility." C) "unsustainable." D) "sacrifice." E) "waste."
The supply curve illustrates
A) the amount of a good producers plan to sell at given prices. B) the amount of a good producers need to sell at given prices. C) the corresponding demand for a good at given prices. D) the sunk costs associated with producing a scarce good.