The market for "lemons" is one in which
a. the rational buyer discounts
b. the seller's product claims are unverifiable at the point of purchase
c. "the bad apples drive out the good"
d. the problem of adverse selection is rampant
e. all of the above
e
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Economists often find it worthwhile to make assumptions that do not necessarily describe the real world
a. True b. False Indicate whether the statement is true or false
Answer the following statement(s) true (T) or false (F)
1. Economic growth is typically measured in terms of real GDP per capita. 2. A slight difference in economic growth rates between two countries generally results in only minor differences in wealth in the long term. 3. A rise in productivity usually results in a higher standard of living. 4. A country that is increasing its rate of consumption is reducing its level of production. 5. The four factors that determine productivity and economic growth are natural resources, human capital, physical capital, and technology.
An example of price discrimination is the price charged for:
A. coffee. B. college admission. C. cashmere sweaters. D. cough syrup.
Used alone, an expenditure-switching policy that turns spending from foreign goods to domestic goods
A) will not reduce the current account deficit. B) is likely to cause a recession. C) will be likely to increase the current account deficit. D) is likely to increase domestic inflation.