An approach that can be taken by someone directly involved in a transaction to solve the problems caused by information asymmetry is:
A. proofing.
B. mandating that information be shared.
C. building a reputation.
D. disclosure laws.
Answer: C
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We would expect that a rise in labor supply will have a proportionately larger effect on the market wage rate when
A) the demand for labor is unitary elastic. B) the demand for labor is inelastic. C) the supply for labor is elastic. D) the demand for labor is elastic.
Your sister always brags about how savvy of a grocery shopper she is. She believes that she saves lots of money by paying with coupons and making her grocery purchases at multiple stores to get the lowest prices on all goods. She may overestimate her savings because:
A. she does not count the value of the time it took to sort and clip coupons as a cost. B. she does not count the cost of the gas used driving extra miles to multiple grocery stores. C. she does not count the value of the extra time it takes to stand in multiple lines at multiple stores and use multiple coupons compared to a trip to one store with no coupons. D. All of these.
A firm operating at MC = MR must be making a profit
a. True b. False Indicate whether the statement is true or false
Autonomous consumption
A. gives the amount a person changes planned consumption for a change in real disposable income. B. is the same as the break-even point. C. is the amount total disposable income less planned consumption. D. is the amount of consumption that does not depend on the level of disposable income.