The production-possibility curve alone does not provide enough information to determine the amount of each good produced by the economy.

Which of the following assertions about pollution is generally agreed with by economists?

A) Pollution is never a problem because those who pollute and the victims of pollution can always bargain with one another and arrive at a suitable outcome. B) Due to the demand for products made by those who pollute, it is best to not restrict pollution. C) The problem we face in dealing with pollution is determining the optimal amount of pollution. D) The ideal amount of pollution is no pollution.

People who are the most willing to pay high interest rates for loans may have bad credit ratings. This is an example of:

A. moral hazard. B. an experience rating. C. adverse selection. D. a negative spillover.