Which of the following is the outcome of the lemons problem in the used-car market?
A. No cars will be traded in the market.
B. Only low-quality cars will be traded in the market.
C. Only high-quality cars will be traded in the market.
D. Both low-quality and high-quality cars will be traded in the market.
Answer: B
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Consider a market consisting of seven firms with market shares of 40, 20, 10, 10, 8, 7, and 5 percent, respectively. Which of the following statements is true?
a. The four-firm concentration ratio would be 0.03. b. The Herfindahl index would be 1,000. c. The Herfindahl index would be 2,228. d. The Herfindahl index would be 1,500. e. The Herfindahl index would be 2,338.
The Laffer curve shows the relationship between tax
a. revenue and tax rates b. revenue and take-home pay c. revenue and government spending d. rates and take-home pay e. rates and government spending
The BankInc case shows the potential of shifting from ________ tasks to ________ task assignments.
A. broad; specialized B. broad; functional C. functional; geographic D. specialized; broad
Exhibit 3-3 Demand curves
Assume that crackers and soup are complementary goods. Which of the graphs in Exhibit 3-3 depicts the effect of a promotional discount that decreases the price of crackers on the demand for soup?
A. Graph A. B. Graph B. C. Graph C. D. Graph D.