The "lemons problem" is overcome in the used car market by
A) strict government regulation of private deals between individual buyers and sellers of used cars.
B) most used cars selling for well below their true values.
C) "lemon insurance" policies being offered by insurance companies.
D) the existence of used car dealers who are concerned about maintaining their reputations.
D
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In the 1970s, a period of a high rate of inflation, a news magazine article listed people who were losing from inflation because their real purchasing power was falling. Those who lost the most were university professors
Which of the following explains this? A) Their wage rates did not increase as much as the CPI. B) The marginal benefit of their work was falling. C) The professors' market basket was different than the market basket used to calculate the CPI. D) Their wage rates increased more rapidly than the CPI. E) The professors suffered from the CPI bias.
Which of the following factors weakens the case for private-sector provision of goods and services relative to public-sector provision?
a. constitutional rules b. the shortsightedness effect c. the special-interest effect d. public goods
Antitrust laws may
a. enhance the ability of firms to capture profits from a concentration of market power. b. enhance the ability of firms to reduce economic losses. c. restrict the ability of firms to operate at the socially efficient level of production. d. restrict the ability of firms to merge.
Keynes’ great book offered the promise of ending depressions through
A. investors reacting to lower interest rates. B. consumers taking over the ownership of factories. C. government nationalizing key industries. D. government influencing aggregate demand.