Figure 9.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. At any price between $X and $Z:
A. only plums will be supplied.
B. only lemons will be supplied.
C. both plums and lemons will be supplied.
D. neither plums nor lemons will be supplied.
Answer: B
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In the figure above, suppose the original budget line is BD. A fall in the price of a compact disc will
A) rotate the budget line to AD. B) rotate the budget line to CD. C) not move the budget line. D) result in a parallel leftward shift of the budget line.
__________ occurs because firms have an incentive to become riskier after their loans are funded
A) Moral hazard B) Adverse selection C) Manager-stockholder conflict D) Manager-lender conflict
Excess reserves are equal to:
a. total reserves plus required reserves. b. total reserves multiplied by required reserves. c. total reserves minus loans. d. total reserves minus required reserves. e. required reserves minus loans.
The best example of a public good is
A. education. B. national defense. C. automobiles. D. electricity.