Refer to Table 9.2. In which market do buyers underestimate the chance of getting a lemon?
A. 1 only
B. 2 only
C. 1 and 3 only
D. 2 and 3 only
Answer: D
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
The best explanation for the late 1994/early 1995 collapse of the Mexican peso and stock market is
(a) free movement of capital internationally is destabilizing for a developing country. (b) portfolio investments were camouflaging overvalued exchange rates. (c) debt for equity swaps had created imbalances in the ownership structure of the economy. (d) the potential benefits of NAFTA had been oversold.
Firms in a perfectly competitive market produce at minimum average cost in the short run and the long run.
Answer the following statement true (T) or false (F)
If the general level of prices is lower than business decision makers anticipated when they entered into long-term contracts for raw materials and other resources, which of the following is most likely to occur?
a. An economic boom. b. Highly attractive profit margins. c. An actual rate of unemployment that is greater than the natural rate of unemployment d. A sharp increase in imports.