A consumer is likely to avoid adverse selection and get a high-quality lunch at
A) a snack bar at a traveling carnival.
B) a vendor who parks her cart at a different location every noon.
C) a restaurant in the center of a business district.
D) a restaurant located next door to Disneyland.
C
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Suppose Spam is an inferior good. If the U.S. economy hit bad times, and demanders' incomes were to fall, which of the following would tend to occur?
A) Spam sales would increase. B) Spam demand would decrease. C) The price of Spam would increase. D) Both A and C above. E) Both B and C above.
Why is it important to understand fixed exchange rates in the modern global economy?
What will be an ideal response?
Suppose an individual consumes just pizza and soda. Using a graph, explain how the substitution bias causes the Lespeyres price index to overstate the true change in the cost of living resulting from an increase in the price of pizza.
What will be an ideal response?
The data are for:
Answer the question on the basis of the following cost data for a purely competitive seller:
A. the long run.
B. the short run.
C. both the short run and the long run.
D. the intermediate market period only.