People who buy used homes often insist on having a "home inspection" before they finalize the purchase. If the house fails the inspection the buyer has the right to refuse to buy the house unless the seller fixes whatever problems are found. Does this help or hurt the seller?
What will be an ideal response?
If the house is in good shape it will help the seller. Since the buyer doesn't have to worry about the risk of buying a house that has problems, he or she will be willing to pay more for the house. If the house is in bad shape it hurts the seller because the home inspection will stop the buyer from purchasing a home with hidden problems.
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If the nominal GDP were to increase, but the real GDP were to increase by less from one year to the next, we could conclude:
A. prices went up, but output stayed the same. B. prices stayed the same, but output went up. C. both prices and output went up. D. both prices and output stayed the same.
Why does nearly every purchase you make provide you with consumer surplus?
A. Because most consumers who trade in a market have a willingness to pay lower than the price, this means that few trades in a market provide consumer surplus. B. Because most consumers who trade in a market have a willingness to pay greater than the price, this means that most trades in a market provide consumer surplus. C. Most of the goods that a consumer purchases are expensive. Because these purchases are expensive, consumer surplus is very high. D. Most of the goods that a consumer purchases are inexpensive. Because these purchases are inexpensive, the consumer is provided with consumer surplus.
It is possible to purchase diplomas from diploma mills. The situation in which the degrees are more important than the knowledge they are supposed to represent is called:
A. accreditation. B. credentialism. C. cretinism. D. diplomacy.
Consider an industry that is in long-run equilibrium. An increase in demand leads to no change in the price of the good. We know that this is
A) a decreasing-cost industry. B) a constant cost industry. C) an increasing-cost industry. D) not a competitive industry.