Consider a used car market in which half the cars are good and half are bad (lemons). If buyers are rational, the prices being offered for used cars will result in
A) a larger proportion of good cars being sold and consequently, consumer surplus is increased.
B) an equal proportion of good cars and lemons being sold in an inefficient market.
C) a larger proportion of lemons being sold and consequently, producer surplus is increased.
D) an equal proportion of a good cars and lemons being sold in an efficient market.
C
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A large majority of the personal computers (PCs) in the United States use an operating system purchased from Microsoft. Microsoft's relationship with PC manufacturers is an example of which of Porter's competitive forces?
A) the bargaining power of suppliers B) the threat from new entrants C) the bargaining power of buyers D) competition from substitute goods or services
If real GDP has increased, which of the following statements is always true?
A) Nominal GDP has increased. B) Output has increased. C) Prices have remained the same. D) Output might have decreased if prices have risen enough.
National income is defined as gross national product minus
a. depreciation and net taxes. b. national income. c. depreciation. d. personal disposable income.
If other factors are held constant, what happens when the federal government finances a growing budget deficit by increasing the amount it borrows from the private sector?
A) There will be an increase in the interest rate. B) There will be a decrease in the interest rate. C) The crowding out effect will be cancelled out. D) There will be an increase in net exports.