Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cars in the market are lemons (low quality), what is consumers' willingness to pay ($X)?
A. $5,000
B. $3,400
C. $3,000
D. $1,700
Answer: B
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A benefit of unions is that they
A) increase firm profits. B) increase the stability of the workforce. C) increase wage inequality. D) restrict the labor market.
Refer to the diagram. If the budget line shifts from ab to ac, the:
A. consumer's level of total utility will increase.
B. consumer will purchase more of both J and K.
C. consumer will purchase less of both J and K.
D. consumer will purchase more of J and less of K.
According to demographers. The "demographic transition" resulting from an increase in living standards follows a pattern of:
A. Death rates falling ahead of a decline in birth rates B. Death rates falling after birth rates fall C. Death rates rising as birth rates fall D. Death rates rising as birth rates rise
Other things remaining the same, the
A) larger the value of U.S. imports, the smaller is the quantity of foreign currency demanded. B) larger the value of U.S. imports, the greater is the quantity of U.S. dollars supplied to the foreign exchange market. C) lower the exchange rate, the cheaper are foreign-produced goods and services. D) higher the exchange rate, the greater is the expected profit from selling dollars.