Which of the following is an argument an economist would use to argue against market regulation designed to protect consumers?
A. Manufacturers have no incentive to stop the sale of counterfeit products.
B. When a brand name product is found unsafe, the value of the brand is reduced, which gives companies with brand names an incentive to produce high-quality products.
C. Government is more likely to have consumers' interest in mind than does the market.
D. Information is costless and readily available, and so it is up to consumers to beware.
Answer: B
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An industry which has no barriers to entry, no product-promotion strategy, a standardized product, and a very large number of firms operating within it, is said to have:
a. a monopoly market structure. b. perfect competition. c. monopsonistic competition. d. monopolistic competition. e. an oligopoly market structure.
The used car market is:
A. subject to the problem of adverse selection. B. an example of what happens when there is an imbalance of information present in a market. C. used to describe the "lemons" problem. D. All of these statements are true.
Assume that Dusty has $30 in income, the price of a loaf of bread is $1.50, and the price of a jar of peanut butter is $3. Suppose that at the original income of $30, the price of a loaf of bread increased to $3 and the price of a jar of peanut butter decreased to $2. Dusty can buy a maximum of ________ loaves of bread or a maximum of ________ jars of peanut butter.
A. 20; 15 B. 15; 20 C. 15; 10 D. 10; 15
An increase in equilibrium quantity will result from each of the following except
A. an increase in supply and an increase in demand. B. an increase in demand and no change in supply. C. an increase in supply and no change in demand. D. a decrease in demand and a decrease in supply.