People are forced to make choices because of:
A. unlimited wants and unlimited resources.
B. limited wants and unlimited resources.
C. unlimited wants and limited resources.
D. limited wants and limited resources.
Answer: C
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Refer to Table 4-12. The equations above describe the demand and supply for Bubba's Fried Jellybeans. The equilibrium price and quantity for Bubba's Fried Jellybeans are $40 and 5 thousand units. What is the value of producer surplus?
A) $5 thousand B) $12.5 thousand C) $25 thousand D) $37.5 thousand
The primary economic function of financial intermediaries is to help allocate scarce resources to desired uses.
Answer the following statement true (T) or false (F)
If Volkswagen (a German-based firm) produces a car in Tennessee and exports it to Mexico, in which country’s GDP will the car be counted?
A. Germany’s, because Volkswagen is a German company B. Mexico, because that is where the car is purchased C. The United States, because that’s where it was built D. Both Mexico and the United States
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. Initially buyers believe that 80% of used cars in the market are lemons (low quality). Compared to the outcome with these initial expectations, how many fewer cars are sold in equilibrium?
A. 50 B. 80 C. 110 D. The number of cars sold in equilibrium is the same as the outcome with neutral expectations.