Suppose buyers in the used car market are willing to pay $5,000 for a plum (high-quality) used car and $2,500 for a lemon (low-quality) used car. If buyers believe that 50% of the used cars on the market are lemons (low quality), what would they be willing to pay for a used car?
A. $2500
B. $3000
C. $3750
D. $5000
Answer: C
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What is an appropriate definition for business cycles?
a. Business cycles reflect the flow of money between businesses, individuals, and the government. b. Business cycles are recurring, regular, and systematic movements in nominal economic activity around a long term trend. c. Business cycles are recurring, regular, and systematic movements in real economic activity around a long term trend. d. Business cycles are recurring, irregular, and unsystematic movements in real economic activity around a long term trend. e. None of the above.
Which of the following outstanding debts should Jillian pay off first?
A) A three year loan of $5,000 at 0 percent a year from her mom. B) A $2,000 debt on a credit card charging 18 percent annually. C) A home equity loan of $10,000, which has an effective rate of 6 percent after her tax advantages are taken into account. D) A student loan of $40,000 with a fixed rate of 4 percent.
Those who advocate a return to a real gold standard believe that doing so would
A. force countries to pursue sustainable fiscal policies. B. allow countries to earn a higher rate of interest on their holdings of international reserve assets. C. reduce inflation rates by imposing strong discipline on national monetary authorities. D. reduce unemployment rates by allowing countries to have independent monetary policies.
Recall the Application about the merger of Office Depot and Office Max to answer the following question(s).Recall the Application. In 2013, the Federal Trade Commission (FTC) ________ the merger of Office Depot and Office Max by concluding that it would not ________ competition in the retail office-supply market.
A. approved; decrease B. approved; increase C. denied; decrease D. denied; increase