Which of the following is a positive economic statement?
A) The standard of living in the United States should be higher.
B) If the price of iPhones falls, a larger quantity of iPhones will be purchased.
C) The government should revamp the health care system.
D) The U.S. government should not have bailed out U.S. auto manufacturers.
Answer: B
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A monopoly is a firm that is the only seller of a good or service that does not have a close substitute
Indicate whether the statement is true or false
"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?
A. In neither statement. B. In the second statement. C. In the first statement. D. In both statements.
Which of the following is the outcome of the lemons problem in the used-car market?
A) Only low-quality cars will be traded in the market. B) Only high-quality cars will be traded in the market. C) Both low-quality and high-quality cars will be traded in the market. D) No cars will be traded in the market.
Suppose a public good that is worth $1 billion is not produced by the market, and so the government provides it, but at a cost of $3 billion. This attempt to correct a market failure has:
A. given rise to the problem of free riders. B. resulted in an information asymmetry for the government. C. been successful since the public good is now produced. D. resulted in a government failure since use of resources is now less efficient.