Figure 9.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes are lemons (low quality), how many lemons (low quality) will be supplied by sellers?
A. 8
B. 12
C. 16
D. 22
Answer: D
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The circular flow model illustrates
A. the interdependence of businesses and consumers. B. the importance of having a central plan for the economy. C. how natural and other resources are created. D. how money is created by the banking system.
Every point on the joint production possibilities frontier represents
A) an initial endowment. B) inefficient production. C) the marginal rate of substitution of goods for each producer. D) at least one producer specializing in production.
Suppose that when the price of oranges is $3 per pound, the quantity demanded is 4.7 tons per day and the quantity supplied is 3.9 tons. In this case:
A. excess supply will lead the price of oranges to rise. B. excess supply will lead the price of oranges to fall. C. excess demand will lead the price of oranges to fall. D. excess demand will lead the price of oranges to rise.
Free trade _____ the efficient use of resources within a country.
Fill in the blank(s) with the appropriate word(s).