The major prediction of the lemons model is that:
A. used cars offered for sale are generally in better-than-average condition.
B. people will generally choose "low-hanging fruit".
C. a used car in good condition can be sold for a higher-than-average price.
D. asymmetric information reduces the average quality of goods offered for sale.
Answer: D
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If the tariffs on textiles, apparel items, and footwear mentioned in the Application were replaced by equivalent voluntary export restraints (VERs), who would benefit the most?
A) the U.S. government B) high-income consumers C) low-income consumers D) the foreign manufacturer
Refer to the above figure. The figure represents the consumption function for a consumer. Point C represents
A) autonomous consumption. B) positive saving. C) negative saving. D) zero saving.
The total fixed cost remains constant as which of the following varies (as depicted on the x-axis of the relevant graph)?
A. cost of resources B. time C. output in a given period of time D. profit
Under what conditions should a competitive firm shut down in the short run?
What will be an ideal response?