You've Been Told That 'When a Change Is Made in Any

question 5

Multiple Choice

You've been told that 'when a change is made in any factor of an established equilibrium, the position of equilibrium will shift in a direction that will minimize or oppose the change.'  This is a statement of which of the following?

• A)molecular collision principle
• B)Le Châtelier's principle
• C)law of definite proportions
• D)Boyle's law

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Definitions:

Adverse Selection

A situation in which sellers have information that buyers do not have, or vice versa, leading to an inefficient market outcome.

Moral Hazard

A situation in which there is a tendency to take riskier behavior when protected from the consequences of that behavior, often seen in insurance and finance.

Asymmetric Information

A situation in economics where one party in a transaction has more or better information than the other, leading to potential imbalances in decisions and market outcomes.

Mechanism Design

A field in economics and game theory that seeks to create economic mechanisms or incentives to achieve desired objectives, often optimizing resource allocation.