Firms rarely offer unlimited warranties on their products, because then their customers would be less careful with upkeep and maintenance. This situation is an example of
a. confiscation of rents.
b. a speculative bubble.
c. moral hazard.
d. the principal-agent problem.
c. moral hazard.
Economics
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An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called
A) procyclical. B) countercyclical. C) acyclical. D) a leading variable.
Economics
A monopolist seller of Irish ceramics faces the following demand function for its product: P = 62 - 3Q. The fixed cost is $10 and the variable cost per unit is $2 . What is the maximizing QUANTITY for this monopoly?
a. Q = 10 b. Q = 15 c. Q = 22 d. Q = 37 e. Q = 41
Economics