In which of the following markets adverse selection may not occur?
a. The market for pre-owned residential apartments
b. The lemons market
c. The market for new sports utility vehicles
d. The capital market
e. The market for health insurance
c
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Linus has just watched two hours of TV. We can say:
A. his second hour of watching TV likely reduced his total utility. B. his second hour of watching TV likely added less to his total utility than did the first. C. if he watches a third hour it will likely decrease his total utility. D. if he watches a third hour it will likely increase his total utility by at least as much as the second.
If the Fed decides to buy T-bills, it increases the demand for T-bills. How will this affect the price of T-bills and the interest rate?
A. T-bill prices fall and interest rates fall. B. T-bill prices rise and interest rates rise. C. T-bill prices rise and interest rates fall. D. T-bill prices fall and interest rates rise.
Import bans, import quotas, voluntary export restraints (VERs), and tariffs on goods all:
A. increase equilibrium quantities and prices. B. decrease equilibrium quantities and prices. C. increase equilibrium quantities, but decrease prices. D. decrease equilibrium quantities, but increase prices.
The marginal revenue product of labor is
A. the additional revenue a firm earns by employing one additional unit of labor. B. the additional profit a firm earns by employing one additional unit of labor. C. the additional revenue the firm makes by selling one unit of labor. D. the marginal product of capital times the price of labor.