What is the term that describes a situation in which one party to an economic transaction has less information than the other party?
A) inefficient market hypothesis
B) asymmetric information
C) unequal market structure
D) monopsony
Answer: B
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The multiplier effect demonstrates how initial government purchases ______.
a. are equal to total purchases b. have no influence on total purchases c. lead to lower total purchases d. lead to higher total purchases
The entry of new firms into a perfectly competitive market will cause a(n) __________.
A) increase in the profitability of existing firms B) decrease in the profitability of existing firms C) leftward shift of the demand curve of the good being produced by the firms D) rightward shift of the demand curve of the good being produced by the firms
Suppose that today, consumers expect the price of a gallon of gasoline to double in the future. Then today the gasoline
A) demand curve will shift to the right. B) demand curve will shift to the left. C) supply curve will shift to the right. D) supply curve will shift to the left.
The demand for computers increases. As a result
A) the quantity demanded of workers increases, the wage rate rises, and the supply of labor increases. B) the demand for workers increases, hiring increases, but wages stay the same since each firm faces a horizontal supply curve of labor. C) the wage rate increases in the industry and the quantity demanded of workers falls. D) the wage rate increases in the industry and the quantity supplied of workers increases.