People who buy used homes often insist on having a "home inspection" before they finalize the purchase. If the house fails the inspection the buyer has the right to refuse to buy the house unless the seller fixes whatever problems are found. Does this help or hurt the seller?
What will be an ideal response?
If the house is in good shape it will help the seller. Since the buyer doesn't have to worry about the risk of buying a house that has problems, he or she will be willing to pay more for the house. If the house is in bad shape it hurts the seller because the home inspection will stop the buyer from purchasing a home with hidden problems.
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Refer to the graph shown. If the price level is P0 the:
A. aggregate demand curve will shift up in the long run to restore equilibrium. B. short-run aggregate supply curve will shift up (to the left) in the long run to restore equilibrium. C. aggregate demand curve will shift down in the long run to restore equilibrium. D. short-run aggregate supply curve will shift down (to the right) in the long run to restore equilibrium.
In reference to industrial policy, networks of interdependent firms, universities, and businesses that focus on production of a specific type of good are called:
A. vertical industries. B. integrated industries. C. bundles. D. clusters.
Which of these variables is not a variable in the equation for the asset market equilibrium condition?
A. Real income B. Expected rate of inflation C. Saving D. Real interest rate
All else equal, forecasting your firm's demand is likely to be less profitable if any of the following are true except for which one?
A) It is difficult to obtain an accurate forecast of your firm's demand. B) Your firm experiences small fluctuations in demand. C) A change in your output level leads to a large change in the firm's marginal cost. D) A change in your output level leads to a small change in the firm's marginal cost.