An example of a market subject to adverse selection would be:
A. the video game market.
B. the new appliance market.
C. the used car market.
D. uniform commodity markets like crude oil.
C. the used car market.
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Lisa is buying bread and at her current purchases, the marginal utility (in dollars) is less than price. If she wants to optimize, she should
A. reduce bread consumption, thus raising P to the level at which MU = P. B. reduce bread consumption, thus raising MU to the level at which MU = P. C. increase bread consumption, thus raising P to the level at which MU = P. D. increase bread consumption, thus lowering MU to the level at which MU = P.
The typical labor supply curve is upward sloping but it is possible for the curve to be backward bending —negatively sloped—at very high wage levels. Which of the following would cause a backward-bending supply curve?
A) This would occur if leisure is an inferior good. B) This would occur when the substitution effect from an increase in the wage becomes larger than the income effect. C) This would occur when a large number of workers choose leisure rather than employment at low wages; only a very large increase in the wage will lead these workers to prefer employment to leisure. D) This would occur when the income effect from an increase in the wage becomes larger than the substitution effect.
The Federal Drug Administration slows the pace at which helpful medications reach the marketplace. The alternative of having the medication available to consumers earlier is an example of:
A. the opportunity cost of the Federal Drug Administration's regulation. B. how easy it is to identify and evaluate sunk costs. C. the marginal benefit of the Federal Drug Administration’s regulation. D. promoting consumer health in the population.
The central bank of a country alters the quantity of money in a way that affects the supply curve in the market for loanable funds. In this way, it is able to change the interest rates
a. True b. False Indicate whether the statement is true or false