Of the following, the best example of private information is when
A) Michael knows the price of a gallon of milk at the minimart but Michelle doesn't know.
B) you know some of your used car's defects but a potential buyer cannot find out about them until after buying.
C) you don't know the quality of a used car and must hire a trained mechanic who tells you all its defects.
D) you pay the owner of a used car a little extra and she lets you know all of the car's defects.
B
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A monopoly creates a deadweight loss because the monopoly
A) sets a price that is too low. B) makes a normal profit. C) does not maximize profit. D) produces less than the efficient quantity. E) produces more than the efficient quantity.
If tax rates are cut, one might expect to observe an increase in the budget deficit. Supply-siders question this observation, arguing that
A. this is a price that must be paid for a more equitable tax system. B. when taxes are cut, expenditures must also be cut. C. a decrease in the tax rate may actually generate an increase in tax revenues. D. tax wedges will make up the difference.
Which of the following have to be in equilibrium for the economy to be in equilibrium?
A) the money market only B) the goods market only C) the output and asset markets D) the savings and investment markets E) the goods and output markets
If the elasticity of supply coefficient for a good is 6, we know:
a. that for every 1% increase in quantity, there will be a 6% increase in price. b. that for every 1% increase in quantity, there will be a 6% decrease in price. c. that for every 6% increase in quantity, there will be a 1% increase in price. d. that for every 6% increase in quantity, there will be a 1% decrease in price.