The market for used cars is not considered perfectly competitive because:
A. there is complete information.
B. the buyers are not price takers.
C. the good is standardized.
D. there are always very low transaction costs.
B. the buyers are not price takers.
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Suppose the United states production possibility frontier was flatter to the widget axis, whereas Germany's was flatter to the butter axis. We now learn that the German wage doubles, but U.S. wages do not change at all. We now know that
A) the United States has no comparative advantage. B) Germany has a comparative advantage in butter. C) the United States has a comparative advantage in butter. D) Not enough information is given. E) Germany gains a comparative advantage in widgets.
The collapse of the subprime mortgage market increased the spread between Baa and default-free U.S. Treasury bonds. This is due to
A) a reduction in risk. B) a reduction in maturity. C) a flight to quality. D) a flight to liquidity.
Reserve requirements for checking accounts are ____ those on time deposits.
A. higher than B. lower than C. the same as
According to the textbook, the owners of restaurants encourage tipping in order to:
A. avoid playing a dominated strategy. B. insure that their waiters earn enough money. C. sustain cooperation in a repeated prisoner's dilemma. D. solve a commitment problem with their wait staff.