The market for used cars is shown in the above figure. Buyers cannot tell whether any given car is a lemon. Forty percent (40%) of all cars are lemons. Which of the following statements is true?
A) All of the cars will be sold.
B) No cars will be sold.
C) Only lemons will be sold.
D) Ten percent of the used cars sold will be lemons.
C
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Suppose that nominal aggregate demand falls by 4 percent, and at the same time every marginal cost also falls by 4 percent. The importance of menu cost theory is that in this situation the price level ________, meaning that a recession ________
A) must fall by 4 percent as well, does not occur B) must fall by 4 percent as well, must occur C) still might not fall, may not occur D) still might not fall, may occur
Which of the following statements is TRUE about income and wealth?
A) Income is a flow measure and wealth is a stock measure. B) Income is a stock measure and wealth is a flow measure. C) Both income and wealth are flow measures. D) Both income and wealth are stock measures.
Studies indicate that the demand for fresh tomatoes is much more elastic than the demand for salt. These findings reflect that
a. tomatoes are a necessity while salt is a luxury. b. it takes longer for consumers to adjust to a change in the price of salt than to a change in the price of tomatoes. c. salt will not spoil as easily as fresh tomatoes. d. more good substitutes exist for fresh tomatoes than for salt.
The country with the lowest child poverty rate of those listed here is
A. Sweden. B. Denmark. C. Britain. D. Australia.