There is an adverse selection problem in the market for used cars because:
A. Owners of poor-quality cars have a strong incentive to sell their cars, while owners of high-quality used cars have more incentive to keep their cars
B. Owners of high-quality cars will have a strong incentive to sell their cars to obtain the higher prices, while owners of poor-quality cars will have more incentive to keep theirs
C. Most people prefer new cars, but the high prices for new cars force most of them to buy used cars
D. Government actions to pass "lemon" laws have reduced information on used cars
A. Owners of poor-quality cars have a strong incentive to sell their cars, while owners of high-quality used cars have more incentive to keep their cars
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When summer hurricanes pass through the Gulf of Mexico and force oil drillers to evacuate their rigs,
A) the supply of oil increases, which therefore increases price. B) the supply of oil increases, which therefore decreases price. C) the supply of oil decreases, which therefore increases price. D) the supply of oil decreases, which therefore decreases price.
All of the following are characteristics of public goods EXCEPT
A) Public goods can be used by more people at no additional cost. B) The good can be consumed by everyone at the same time without reducing what is available for anyone else. C) the exclusion principle D) The goods are perfectly divisible.
The CPI was 96 in 1982, and the CPI was 230 in 2012 . How much money would you have needed in 2012 in order to buy what you could have bought with $500 in 1982?
a. $208.96 b. $1,197.92 c. $697.92 d. $1,697.92
What situation would make the demand for new cars relatively more price elastic?
a. Auto manufacturers have a difficult time hiring skilled workers. b. Auto manufacturers find it easy to hire skilled workers. c. Car buyers are prosperous, and they are seeking luxury cars. d. There is a plentiful supply of used cars.