Table 14.3Refer to Table 14.3. In which market do buyers underestimate the chance of getting a lemon?
A. 1 only
B. 2 only
C. 3 only
D. All of these
Answer: D
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Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study?
a. Unemployment rate falls from 7.5 percent to 7.3 percent. b. Real GDP falls by 0.4 percent in the third quarter. c. Inflation was 2.4 percent last year. d. The price of gasoline rises due to rising oil prices.
The two big problems facing insurance companies in trying to manage risk are:
A. adverse selection and moral hazard. B. moral hazard and diversification. C. risk pooling and diversification. D. risk pooling and adverse selection.
Refer to the information provided in Figure 26.4 below to answer the question(s) that follow.
Figure 26.4Refer to Figure 26.4. During the 2008-2009 recession, many firms in the United States reduced investment in new capital. If the economy was originally at Point A, this would have caused a movement to Point
A. E. B. B. C. C. D. D.
Suppose the value of the price elasticity of supply is 4. What does this mean?
A) For every $1 increase in price, quantity supplied increases by 4 units. B) A 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent. C) A 1 percent increase in the price of the good causes the supply curve to shift upward by 4 percent. D) A 4 percent increase in the price of the good causes quantity supplied to increase by 1 percent.