In the used car market without warranties, adverse selection results in
A) sellers of "lemons" claiming that their car is a lemon.
B) only lemons being available for sale.
C) the market price of used cars equal to that of good used cars.
D) all of the above.
B
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If a consumer is always indifferent between an additional one grapefruit or an additional two oranges, then when oranges are on the horizontal axis the indifference curves:
A) will be straight lines with a slope of -1/2. B) will be straight lines with a slope of -1. C) will be straight lines with a slope of +1/2. D) will be right angles whose corners occur on a ray from the origin with a slope of +2. E) none of the above
Determining the price of mobile phones is a concern of:
A. macroeconomics. B. microeconomics. C. both macroeconomics and microeconomics. D. neither macroeconomics nor microeconomics.
Suppose that Jack promises that if Jill chooses the high price, he will too. Jack has an incentive to cheat on the agreement.
Answer the following statement true (T) or false (F)
Suppose Duracell, an American firm, produces car batteries and sells the batteries for $100 to retailers in the USA, but sells them 20% cheaper to Australia retailers. In this scenario, Duracell is guilty of:
A. dumping in Australia. B. imposing taxes. C. benevolence to Australians. D. fraud.