Which of the Following Practices Are, at Least in Part

question 81

Multiple Choice

Which of the following practices are, at least in part, attempts to reduce moral hazard problems?

• A)The income of waiters and waitresses depends heavily on tips.
• B)An employer pays below equilibrium wages because he thinks his employees are not working as hard as they could be.
• C)The professors leaves the room to prevent cheating on exams.
• D)Tenure professors are not supervised closely.

Explain the impact of changes in the prices of substitute goods on the demand for a product.

Identify the outcomes of simultaneous shifts in both supply and demand curves on equilibrium price and quantity.

Understand the significance of equilibrium in achieving allocative efficiency in markets.

Understand the historical significance of slave rebellions, including the Amistad case and its Supreme Court decision.

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Definitions:

Surplus

A situation where there is excess of supply over demand in the market, leading to downward pressure on prices.

Decrease in Demand

A situation where consumers are willing and able to purchase less of a good or service at any given price, often reflected in a leftward shift of the demand curve.

Decrease in Price

A reduction in the cost of a good or service, often resulting in increased demand or consumption.

Decrease in Supply

A reduction in the total amount of a given good or service that is available to consumers, often leading to higher prices.