For inferior goods, demand will fall when
A. income decreases.
B. price decreases.
C. income increases.
D. price increases.
Answer: C
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Adverse selection and moral hazard are examples of:
A) transaction costs B) information cost C) symmetric information D) financial market efficiency
Suppose a bank lends you $1,000 to purchase a car. Which of the following correctly represents the changes in the bank's balance sheet before you spend the money?
a. Assets: loans, +$1,000 . Liabilities and net worth: checking deposits, +$1,000 b. Assets: loans, -$1,000 . checking deposits, +$1,000 . Liabilities and net worth: no change c. Assets: loans, +$1,000 . checking deposits, -$1,000 . Liabilities and net worth: no change d. Assets: checking deposits, +$1,000 . Liabilities and net worth: loans, +$1,000 e. Assets: checking deposits, +$1,000 . Liabilities and net worth: loans, -$1,000
A monopoly firm selling moustache wax to vain men in a small town is currently maximizing profits by charging a price of $5. It follows that the marginal cost of moustache wax
A. is greater than $5. B. is equal to $5. C. is less than $5. D. None of these choices are true.
Refer to the table above. What is the total revenue when the monopolist charges a price of $6?
A) $1,550 B) $1,800 C) $2,150 D) $3,200