The natural resources used in production are made available in the
A) government market. B) factor market.
C) product market. D) goods and services market.
B
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Suppose that in a market for used cars, there are good used cars and bad used cars (lemons). Consumers are willing to pay as much as $9,000 for a good used car but only $3,000 for a lemon
Sellers of good used cars value their cars at $7,500 each and sellers of lemons value their cars at $1,500 each. Buyers cannot tell if a used car is reliable or is a lemon. Based on this information, what is the likely outcome in the market for used cars? A) Sellers of lemons will drop out of the market. B) Sellers of good used cars will drop out of the market. C) Used cars will sell for $6,000. D) Sellers of good used cars will incur losses.
Which of the following formulas is most representative of a negative income tax proposal?
a. Taxes Owed = (1/4 of Income) $2 b. Taxes Owed = (1/2 of Income) 3/4 c. Taxes Owed = (1/2 of Income) + $10,000 d. Taxes Owed = (1/3 of Income) - $10,000
The aggregate demand curve is:
A) vertical if full employment exists. B) horizontal when there is considerable unemployment in the economy. C) downsloping because of the interest-rate, real-balances, and foreign purchases effects. D) downsloping because production costs decrease as real output rises.
Which of the following can cause a leftward shift in the aggregate supply curve?
A. Lower marginal tax rates. B. A major natural disaster such as hurricane or earthquake. C. A bumper agricultural crop. D. Trade liberalization.