Which of the following is the least likely example of asymmetric information?
A. an insurance company and a client who just obtained a driver's license
B. a seller of used cars and a prospective customer
C. a seller of fresh fruit and a buyer
D. a retailer of online music and a buyer
Answer: D
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The price rationing mechanism of a freely functioning market leads to the most efficient use of resources because
A) all gains from mutually beneficial trade are captured. B) the Federal Trade Commission regulates the market. C) of the rise of the legislative apparatus that supports trade. D) the Justice Department monitors market activities.
Define the natural rate of unemployment and cyclical unemployment
A drop in the demand for soybean meal in China would
A. decrease the total demand for soybeans. B. decrease the price of soybeans. C. increase the quantity of soybeans. D. Both A and B are correct.
Which of the following statements is correct about the demand curve of the perfectly competitive industry?
A) The demand curve of the perfectly competitive industry is horizontal as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is vertical because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve facing an individual firm is horizontal. D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.