Which one of the following is true of a market for used cars?
A. A consumer typically overestimates the probability of getting a lemon (low-quality car).
B. As buyers become more pessimistic about their chances of buying a high-quality car, the price of used cars (both low-quality and high-quality) decreases.
C. There is a public information problem.
D. The willingness to pay is less than the willingness to accept.
Answer: B
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A direct exchange of fish for corn is an example of:
a. storing value. b. a modern exchange method. c. barter. d. a non-coincidence of wants.
If the supply of labor decreases, which of the following events will occur?
A. The wage rate will fall and firms will increase employment up until the point where MRP equals the new wage rate. B. The wage rate will fall and firms will decrease employment to the point where MRP equals the new wage rate. C. The wage rate will increase and firms will increase employment up until the point where MRP equals the new wage rate. D. The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate.
If the structural unemployment rate is 3 percent, the frictional unemployment rate is 2 percent, and the current unemployment rate is 6 percent, then the economy is in a recessionary gap
Indicate whether the statement is true or false
Isoquants slope downward because:
A. the marginal rate of substitution increases. B. as less of one input is used, more of another must be used if costs are to remain constant. C. average total costs decline. D. as less of one input is used, more of another must be used if output is to remain constant.