Recall the Application about federal quality standards in the market for kiwifruit to answer the following question(s).Recall the Application. The asymmetric information about kiwifruit was reduced by:
A. reducing the price of U.S. kiwifruit.
B. advertising.
C. a federal government marketing order.
D. All of these
Answer: C
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In the economy of Confoundia, 500 people have jobs, 1000 people are not working but are searching for work, and 2000 people don't work and don't seek work. The unemployment rate is
A) 25 percent. B) 33 percent. C) 40 percent. D) 50 percent. E) 66 percent.
Refer to Figure 8.3. Holding other variables constant, a decrease in households' wealth accompanied by an increase in the capital stock will definitely result in
A) an increase in the equilibrium quantity of labor. B) a decrease in the equilibrium quantity of labor. C) an increase in the equilibrium real wage. D) a decrease in the equilibrium real wage.
The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. What policy could government adopt to prevent entry deterrence by the incumbent?
A) production quotas B) price ceiling C) safety standards D) None of the above is correct.
If an economy is above potential output and the government opts for a contractionary fiscal policy (running surpluses) to shift the AD curve, an economist with a Classical view, who holds the Ricardian equivalence theorem to be practically true, would conclude that the AD curve:
A. does not shift since the lower government spending is offset by higher private consumption. B. shifts to the left due to lower government spending. C. does not shift since the lower government spending is offset by lower private consumption. D. shifts to the right due to lower government spending.