One effect of adverse selection in a market is that the equilibrium quantity of the product may
be smaller than it would have been if there were no asymmetric information problems.
Indicate whether the statement is true or false
TRUE
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When the value of the dollar changes from £0.75 to £0.5, then the British pound has ________ and the U.S. dollar has ________
A) appreciated; appreciated B) depreciated; appreciated C) appreciated; depreciated D) depreciated; depreciated
Which item is not a factor of production?
A. land B. machines and buildings C. money D. labor
Real GDP per person can increase:
A. if the share of population employed and/or average labor productivity increases. B. only if the share of the population employed decreases. C. only if the share of the population employed increases. D. only if average labor productivity increases.
Assume a market that has an equilibrium price of $4. If the market price is set at $8, which of the following is true?
A. Some surplus is transferred from consumers to producers, causing total surplus to increase. B. All surplus is transferred from consumers to producers, and total surplus stays the same. C. Some surplus is transferred from consumers to producers, but total surplus falls. D. Some surplus is transferred from producers to consumers, but total surplus falls.