Figure 9.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. If buyers believe that 50% of used digital cameras in the market are lemons (low quality), what is consumers' willingness to pay ($W)?
A. $100
B. $200
C. $300
D. $400
Answer: C
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Assume that it is predicted that for the years after you graduate from college, the entire economy will experience a long period of recession during which people's incomes decrease
What type of industry would be the best for you to find employment if this prediction is correct? An industry that produces a product that A) is income elastic. B) is income inelastic. C) is inferior. D) is a complement. E) none of these industries
A key objective of a government safety net for the banking system is to ensure ________
A) that the poor have access to bank services B) an efficient allocation of credit C) bank profitability D) that depositors always believe that their money is safe in the bank
The points on a production possibilities curve show
A. Actual output. B. Desired output. C. Potential output. D. None of the choices are correct.
According to supply-side economists, a cut in taxes will
a. cause people to spend more, causing the aggregate supply curve to shift to the right b. act as a work incentive causing the aggregate supply curve to shift to the right c. encourage people to work more to get more income to spend, causing the aggregate supply curve to shift to the left d. encourage people to work more hours and be more productive, causing the society to move upward along the aggregate supply curve e. increase private and reduce government spending so that aggregate demand remains fairly constant