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Author Question: Suppose the new doctor you found in the yellow pages turns out to be a charlatan. This is an example ... (Read 16 times)

TFauchery

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on: Jun 30, 2018
Suppose the new doctor you found in the yellow pages turns out to be a charlatan. This is an example of
 a. natural selection
  b. moral hazard
  c. hidden actions
  d. external costs
  e. hidden characteristics

Question 2

The Big Mac Index uses the price of a Big Mac in local currencies around the world as a way of testing the purchasing power parity theory. Which of the following is a partial explanation for why the PPP theory does not apply to the Big Mac Index?
 a. Wages do not differ across countries
  b. Trade barriers, such as tariffs and quotas on beef, may distort local prices
  c. Taxes do not distort local prices
  d. Rent does not vary substantially across countries
  e. The Big Mac is traded internationally


Brenm

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Reply #1 on: Jun 30, 2018
Answer to Question 1

E

Answer to Question 2

B


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