Adverse selection can occur when
A) all persons involved in a transaction have full information.
B) one person has information not available to others.
C) post-agreement incentives result in workers shirking.
D) nobody has any information about a particular product.
B
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If an economic agent's returns to entrepreneurship is greater than his opportunity cost of entrepreneurship:
A) he will always make losses if he chooses to be an entrepreneur. B) he will most likely not choose to be an entrepreneur. C) he will always make profits if he chooses to be an entrepreneur. D) he will most likely choose to be an entrepreneur.
This year, real GDP per person in Country A is eight times real GDP per person in Country B
If Country B's real GDP per person grows at a rate of 5 percent, about how many years will it take for Country B to reach the level of real GDP per person in Country A in this year? A) 42 years B) 56 years C) 14 years D) 28 years E) It will never reach Country A's level of GDP per person.