Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cars in the market are lemons (low quality), what percent of used cars sold will actually be plums?
A. 20%
B. 25%
C. 33.33%
D. 75%
Answer: A
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A decrease in price will result in an increase in total revenue if:
A) the percentage change in quantity demanded is less than the percentage change in price. B) the percentage change in quantity demanded is greater than the percentage change in price. C) demand is inelastic. D) the consumer is operating along a linear demand curve at a point at which the price is very low and the quantity demanded is very high.
DeWitt Clinton is most recognized for
a. inventing the wheat combine. b. being one of the primary advocates of the abolition movement. c. developing the technology to power railroad engines. d. overseeing the building of the Erie Canal.
Which of the following is true of U.S. national debt between 1958 and 2010?
a. Total debt in the U.S. crossed $104 trillion in 2009. b. Debt as a percentage of GDP was the highest in the year 1978. c. Net interest payable by the U.S. government was the highest in the year 1990. d. Interest payment as a percentage of total government spending was the highest in 2009. e. Net interest payable by the U.S. government crossed $250 billion in 2009.
You are the mayor of your home town, and one day you arrive at city hall to find angry voters demonstrating against you. They are mad because your office created a garbage-collection monopoly by awarding only one company a permit to collect garbage in
your town. The voters claim that the company is overcharging and providing poor service. They want you to do something that will lower rates and improve service. You call your staff economist, who presents evidence that there are substantial increasing economies of scale to garbage collection. What are your options if you are interested in efficiency?