Some sellers of used cars provide warranties to buyers, with the aim of reassuring buyers that the car is of good quality. These warranties help reduce the chance of what occurring?
A. Negative externalities.
B. Adverse selection.
C. Spillover benefits.
D. Moral hazard.
Answer: B
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Comparing the minimum wages between 1974 and 2011 addresses the economic concept of
A) the principle of voluntary exchange. B) the principle of diminishing returns. C) the real-nominal principle. D) the marginal principle.
Why does marginal cost eventually rise as output increases?
What will be an ideal response?
In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and
the IS curve to shift to the ________, everything else held constant. A) rise; left B) rise; right C) fall; left D) fall; right
If the redistributive character of the tax system is measured by looking at the additional taxes paid by high-income individuals and reduction in taxes to low-income individuals, the dollar amount of redistribution will be _____
a. overestimated b. underestimated c. estimated correctly d. estimated improperly, possibly over or under