When constructing economic models, economists are more concerned with
A. what people think than what they need.
B. what people say than how they act.
C. what people say than what they do.
D. what people do than what they say.
Answer: D
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Other things constant, a lowering of interest rates on used car loans would tend to
A) reduce the demand for used car loans. B) increase the demand for used car loans. C) increase the supply of used car loans. D) reduce the supply of used car loans. E) do none of the above.
The lemons problem is that when there are hidden characteristics known only to the seller of a used car,
a. the ratio of lemons to high-quality cars is likely to be high b. the ratio of lemons to high-quality cars is likely to be low c. good used cars will sell for more than their market value d. no lemons will be offered on the market e. the price of lemons will be below their market value
A _____ between a parent company and the operator of a local outlet specifies each party's duties and the structure of payments that link them, and can turn the combined organization into a stronger competitor
a. volumetric interdependence b. franchise contract c. joint venture d. buy-sell transaction
One problem with the European Union's choice regarding equality versus efficiency is that it may inadvertently shrink the size of its "economic pie"
a. True b. False Indicate whether the statement is true or false