In a market with asymmetric information, hidden actions exist if:
A) the buyer or the seller takes actions that are relevant for but not observed by, the other party.
B) the production or consumption of the good being transacted gives rise to positive externalities.
C) the production or consumption of the good being transacted gives rise to negative externalities.
D) the production of the good being transacted involves a huge opportunity cost.
A
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Net public debt is
A) the excess of annual tax revenues over annual government spending. B) the sum owed by the public to keep the Social Security system afloat. C) the portion of government debt held by private individuals and firms. D) the excess of annual government spending over annual tax revenues.
Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. Interlace's profit maximizing price is ________ per bottle
A) 70 cents B) 50 cents C) 40 cents D) 1 dollar