If the market for used computers has only lemons (low-quality computers) then the market:
A. is an example of a thick market.
B. suffers from an adverse selection problem.
C. is a type of monopoly.
D. must be monopolistically competitive.
Answer: B
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In a perfectly competitive market, a(n) ________ occurs because ________
A) efficient outcome; total surplus is maximized B) deadweight loss; firms minimize average minimum cost C) efficient outcome; the fair rules condition is met D) deadweight loss; firms must be price takers E) deadweight loss; total surplus is minimized
On the 45-degree line diagram, for points that lie below the 45-degree line
A) planned aggregate expenditure is less than GDP. B) planned aggregate expenditure is greater than GDP. C) planned aggregate expenditure is equal to GDP. D) planned aggregate expenditure is less than aggregate income.
In order to encourage domestic saving, it is necessary to have:
a. a laissez faire economy. b. a balanced fiscal budget. c. a large number of government subsidies. d. a stable system of property rights. e. a highly developed banking system.
In all cases, positive economics deals with
A) what is. B) what should be. C) relatively small units in the economy. D) aggregates or the entire economy.