A bumper-to-bumper warranty on a used car is a signaling device that
A) identifies a high-quality car as a high-quality car, because putting such a warranty on a low-quality car would be prohibitively costly.
B) disguises a low-quality car as a high-quality car, and thus makes it easier to sell.
C) is necessary in order to sell a low-quality car at all. Without it no one would risk buying the car.
D) isn't necessary if there is a mix of high-quality and low-quality cars in the market.
E) helps sellers determine whether the buyer is truly looking for a high-quality car.
A
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Refer to Figure 4-8. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the quantity of apartments demanded at the new price?
A) 0 B) 200 C) 300 D) 500
Related to the Economics in Practice on page 51: The Amazon Kindle and the electronic textbooks available for the Kindle are complementary goods. Electronic textbooks and traditional, hard-copy textbooks are substitute products. If the price of electronic textbooks for the Kindle decreases,
A. demand for the Kindle increases, demand for electronic textbooks increases, and demand for traditional, hard-copy textbooks decreases. B. the quantity of Kindles demanded increases, demand for electronic textbooks increases, and the quantity of traditional, hard-copy textbooks demanded decreases. C. demand for the Kindle increases, the quantity of electronic textbooks demanded increases, and demand for traditional, hard-copy textbooks decreases. D. demand for the Kindle decreases, the quantity of electronic textbooks demanded increases, and demand for traditional, hard-copy textbooks decreases.
In response to an unanticipated easing of monetary policy, the price level ________ at first, then ________ after a year.
A. rises; returns most of the way to its original value B. falls; returns most of the way to its original value C. remains roughly unchanged; begins to rise D. remains roughly unchanged; begins to fall
Official unemployment rate statistics may:
A. Overstate the amount of unemployment by including part-time workers in the calculations B. Understate the amount of unemployment by excluding part-time workers in the calculations C. Overstate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment D. Understate the amount of unemployment because of the presence of "discouraged" workers who are not actively seeking employment