Suppose you purchase a new home for $250,000, making a down payment of 25% and taking out a mortgage on the balance. What is the return on your investment in your home if one year later the price of your home increases by 30%?
A) 27.5%
B) 41.7%
C) 83.3%
D) 120%
D
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Use the following graphs for a perfectly competitive market in the short run to answer the next question.
The graphs suggest that in the long run, assuming no changes in the given information, the market
A. supply curve will shift to the right. B. demand curve will shift to the right. C. supply curve will shift to the left. D. demand curve will shift to the left.
Assume equilibrium real GDP per year is equal to full-employment real GDP. Which of the following will cause a recessionary gap?
A) a discovery of a new raw material B) a reduction in aggregate demand C) a temporary reduction in the price of oil D) an increase in aggregate demand
Which of the following pairs is most likely to represent substitute goods?
a. Hamburgers and hamburger rolls. b. Movies and popcorn. c. Beer and pretzels. d. Shoes and shoelaces. e. Pork and beef.
Which of the following can be a solution to the lemons problem?
a. Providing testimonials from previous buyers. b. Providing accessories to be used in the car. c. Providing discount on the purchase of a car. d. Providing a warranty that covers the costs of certain repairs.