Assume the XYZ Corporation is producing 20 units of output. It is selling this output in a purely competitive market at $10 per unit. Its total fixed costs are $100 and its average variable cost is $3 at 20 units of output. This corporation:

Which of the following is NOT an example of consumer behavior consistent with the standard assumptions of microeconomic theory?

A) A concern for fairness can influence purchasing patterns. B) When demand increases, all else being equal, consumers expect price to rise. C) After a snowstorm, the demand for snow shovels increases. D) Snow shovels and snow plows are substitute goods. E) none of the above

One difference between moral hazard and adverse selection is

a. Adverse selection has to do with unobservable characteristics of individuals b. Moral hazard has to do with unobservable actions of individuals c. Adverse selection is individuals change their behaviors because of a contract d. Only A&B