Refer to Table 9.1. In which market do buyers underestimate the chance of getting a lemon?
A. 1 only
B. 2 only
C. 3 only
D. 1 and 3 only
Answer: A
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Which of the following has been the most likely effect of the Fed's credit policy?
A) Banks and other financial institutions have taken more time to recover from the 2008-2009 financial meltdown. B) The scope of asymmetric information problems in the banking industry has reduced. C) The money multiplier and the link between the money supply and the economy have become unstable. D) The federal funds rate and the discount rate have dropped to negative levels.
Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at 20¢ per pound when 500 pounds are grown. If the long-run supply curve is horizontal, then
A) some firms will enjoy long-run profits because they operate at minimum average cost. B) the long-run price will be 20¢ per pound. C) each consumer will purchase $100 worth of potatoes. D) the long-run price will be set just above 20¢ per pound.
If a U.S. importer has to write a $200 check to cover a 20,000 yen purchase from Japan, the exchange rate is
A. 200 yen to a dollar. B. 100 yen to a dollar. C. 20 yen to a dollar. D. 10 yen to a dollar.
When Sally increases the consumption of pizza and decrease the consumption of soda, her marginal utility of
A. both pizza and soda will decrease. B. pizza falls and the marginal utility of soda will increase. C. both pizza and soda will increase. D. pizza increases and the marginal utility of soda will fall.