Figure 9.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. If buyers believe that all of the used refrigerators in the market are lemons (low quality), what number of used refrigerators sold will actually be lemons (low quality)?
A. 50
B. 125
C. 175
D. 250
Answer: B
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If a monopolized industry should become purely competitive without any change in cost conditions:
A. both price and quantity produced will decrease. B. both price and quantity produced will increase. C. price will increase and quantity produced will decrease. D. price will decrease and quantity produced will increase.
Figure 33-8
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In Figure 33-8, the aggregate supply curve is shifting inward as we move from
A. A to C. B. C to E. C. A to B. D. D to C.
If the production possibilities curve is a downward sloping straight line, then
A) resources are highly specialized, making it difficult to use them for alternative uses. B) technological change has increased. C) production is efficient only when producing at the mid-point. D) all resources must be perfectly adaptable for alternative uses.
Which of the following statements about stocks and bonds is true?
A. Stocks pay interest while bonds pay dividends B. One can lose with stocks, but not with bonds C. The U.S. Federal government issues bonds, but not stocks D. Bonds are long term while stocks are short term investments