If a price support is maintained above the equilibrium price, the result will be a
A. Surplus of the product.
B. Market price equal to the equilibrium price.
C. Shortage of the product.
D. Market price that is too low.
Answer: A
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One way the government can enhance efficiency through the management of common resources is by:
A. banning the good. B. setting quotas for the good. C. government provision of the good. D. All of these can be effective and efficiency-enhancing solutions.
Which of the following defines the "medium of exchange" function of money?
a. To provide a common measurement of the relative value of different goods and services. b. The ability of money to hold value over time. c. The materials used manufacture money are of medium grade so that people will not hoard money for its commodity value. d. Money that is widely accepted in exchange for goods and services.
The classic example of adverse selection is the market for used cars
a. True b. False Indicate whether the statement is true or false
The Permanent Income and Life-Cycle Hypothesis imply that
A. the primary determinant of current consumption is permanent income. B. the primary determinant of permanent income is current consumption. C. consumers generally favor current consumption over future consumption. D. consumers are more likely to save if they are uncertain about the future.