Many studies show that price and concentration ratios are
a. not related
b. inversely related
c. positively related
d. constant
e. both higher in perfectly competitive markets
C
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Adverse selection refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off
Indicate whether the statement is true or false
James used $200,00 . from his savings account that paid an annual interest of 10% to purchase a hardware store. After one year, James sold the business for 300,000 . His accountant calculated his profit to be:
a. $300,000 b. $100,000 c. $80,000 d. $20,000
Under both the gold standard and the gold exchange standard countries bought and sold U.S. dollars to maintain a fixed exchange rate with the dollar
a. True b. False Indicate whether the statement is true or false
Manny's Bar-n-Grill is next door to a franchised fast-food restaurant near a busy freeway exit. Essentially, the menus, food quality, atmosphere, and service are equal at the two restaurants. Nevertheless, the nationally franchised restaurant can attract more customers, even though its prices are higher. This situation
a. indicates that people are irrational because it never makes sense to pay a higher price when a product is cheaper elsewhere. b. is one in which the national franchise provides uninformed consumers with valuable information that reduces their risk of being unsatisfied with the purchase. c. reflects the greater elasticity of supply for food at Manny's Bar-n-Grill relative to the nationally franchised restaurant. d. is inconsistent with the basic postulates that underlie the economic way of thinking.