The demand for a monopoly's output is p = 100 - Q. The firm's production function is Q = 2L. Which of the following is the firm's demand for labor?

According to the permanent income hypothesis, a temporary increase in income that does not affect average lifetime income would

A) cause no change in consumption. B) cause a decrease in consumption and saving by the same amount. C) cause an increase in consumption and saving by the same amount. D) cause a large increase in consumption.

The possibility that a borrower might engage in riskier behavior after a loan is made is called

A) adverse selection. B) liability aversion. C) moral hazard. D) the risk of default.