If a typical consumer is willing to pay $3,000 for a plum and $1,000 for a lemon, and there is a 50% chance of getting a lemon, the typical consumer is willing to pay $2,000 for a used car.
Answer the following statement true (T) or false (F)
True
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Spending on consumer durables decreases as the interest rate increases
Indicate whether the statement is true or false
An increasing-cost industry will have
A) a perfectly elastic long-run supply curve. B) a perfectly inelastic long-run supply curve. C) an upward sloping supply curve in the long run. D) an upward sloping demand curve in the long run.
A firm sells a product in a perfectly competitive market. The marginal cost of the product at the current output level of 200 units is $4. The minimum possible average variable cost is $3.50. The market price of the product is $3. To maximize profits or minimize losses, the firm should
A. shut down. B. continue producing 200 units. C. increase production to more than 200 units. D. decrease production to less than 200 units.
The concept of comparative advantage applies:
a. only to people with at least a high school diploma. b. only to people who are currently employed. c. to situations in which you have information about the salary levels of those with whom you are competing for a job. d. to every case of trade or exchange. e. only to goods that are sold in the domestic market.