Figure 14.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. If buyers believe that 50% of used refrigerators in the market are lemons (low quality), how many plums (high quality) will be supplied by sellers?
A. 50
B. 125
C. 175
D. 250
Answer: A
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Use the following graph, which shows the supply and demand for British pounds, to answer the next question.
D1 and S1 represent the initial demand and supply curves. What will be the new equilibrium point if there is an increase in consumer spending by the British on American products and a decrease in consumer spending by Americans on British products?
A. Point J B. Point C C. Point A D. Point H
A decrease in the money wage rate increases ________ and an increase in the full-employment quantity of labor increases ________
A) the SAS and the LAS; only the SAS B) the SAS and the LAS; only the LAS C) only the SAS; the SAS and the LAS D) only the LAS; the SAS and the LAS
If a bank's deposits at the Federal Reserve equal $40 million and its total reserves equal $35 million, what does the bank's vault cash equal?
A) $5 million B) $75 million C) $37.5 million D) $30 million
Which of the following is most important for the achievement of higher income levels and living standards?
a. an increase in total employment b. increases in government spending that create jobs c. production of additional goods and services that people value highly relative to the cost of their production d. restriction of imports that expand employment in the protected industries