Suppose a new law requires all piercing studios to pass tougher licensing tests and to begin using more costly sterilization methods. Other things constant, this law would cause:
A. an increase in the supply of piercings and a lower price for piercings.
B. an increase in the supply of piercings and a higher price for piercings.
C. a decrease in the supply of piercings and a higher price for piercings.
D. a decrease in the supply of piercings and a lower price for piercings.
Answer: C
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The major prediction of the lemons model is that:
A. used cars offered for sale are generally in better-than-average condition. B. people will generally choose "low-hanging fruit". C. a used car in good condition can be sold for a higher-than-average price. D. asymmetric information reduces the average quality of goods offered for sale.
In the above figure, along which range would total revenue rise by lowering prices?
A. below point e B. between point d and point e C. between point c and point d D. between point a and point b
The relationship between the aggregate demand curve and the aggregate expenditures model is derived from the fact that a(n) ________.
A. decrease in the price level shifts the aggregate expenditures schedule downward and decreases equilibrium GDP B. increase in the price level shifts the aggregate expenditures schedule downward and increases equilibrium GDP C. increase in the price level shifts the aggregate expenditures schedule upward and decreases equilibrium GDP D. decrease in the price level shifts the aggregate expenditures schedule upward and increases equilibrium GDP
Fill in the blank: Middlemen tend to have ________ in information production
A) no interest B) a comparative advantage C) a monopoly D) little time to engage E) a wasteful way of engaging