Exit from a perfectly competitive industry causes the market supply curve to shift to the left, resulting in a lower quantity of output and a higher price
a. True
b. False
Indicate whether the statement is true or false
True
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When people’s income increases, demand for science fiction novels increases. The novels are
a. an inferior good. b. substitutes. c. a normal good. d. regular goods.
A street vendor sells a replica of a pair of designer shoes to a young woman who believes the shoes are authentic. The street vendor is engaging in
a. both moral hazard and adverse selection. b. neither moral hazard nor adverse selection. c. moral hazard, but not adverse selection. d. adverse selection, but not moral hazard.
One way government can help internalize external benefits is to tax consumption that produces external benefits
Indicate whether the statement is true or false
Aggregate income includes all of the following except:
A. transfer payments. B. interest. C. employee compensation. D. rent.