We all use the services of speculators as information in reaching our own economic decisions
A) because speculators are aggressive about marketing the information they produce.
B) because we all use prices, which are set by bids and offers based on predictions of the future.
C) if we buy or sell commodities through an organized exchange.
D) if we play the stock market.
B
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If 10 units of a good are sold at a market price of $40 each, then
a. the value to some individual of the tenth unit of output is $40 b. the economy is efficient c. selling an 11th unit would be a Pareto improvement d. a side payment of $40 is needed to ensure that the good is produced e. the market must be perfectly competitive
Moral hazard
A. occurs when managers pursue profit maximization without regard to the interests of society in general. B. is the cause of principal-agent problems. C. occurs only rarely in modern corporations. D. exists when either party to a contract has an incentive to cancel the contract.