Behavioral economists recommend mechanisms to help people actually do things they say they want to do but often don't. Such mechanisms are often called
A. savings rates.
B. charitable donations.
C. self-control.
D. commitment devices.
D. commitment devices.
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During the peak phase of a business cycle, a business could be expected to have
A. high prices. B. reduced sales. C. low profits. D. staff reductions.
Subsidies are most likely to:
A. increase total economic surplus. B. reduce consumer surplus. C. reduce total economic surplus. D. leave total economic surplus unchanged, but transfer surplus from producers to consumers.
Figure 9.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes in the market are lemons (low quality), what fraction of used bikes sold will actually be plums (high quality)?
A. 8/30 B. 22/30 C. 8/22 D. 30/30
Which of the following is an example of predatory pricing?
A. In order to buy Microsoft Windows, you must also purchase Internet Explorer. B. Bus rides are cheaper for senior citizens than for other people. C. Prices are set low enough to drive other firms out of a market. D. Prices are set just high enough to prevent other firms from entering the market.