Figure 9.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. Initially buyers believe that 50% of used refrigerators in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer refrigerators are sold in equilibrium?
A. 50
B. 125
C. 175
D. 250
Answer: C
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Use the following diagrams for the U.S. economy to answer the next question.
If the economy is initially at full employment, which of the diagrams best portrays a recession resulting from a decrease in government purchases?
A. Graph (1) B. Graph (2) C. Graph (3) D. Graph (4)
Suppose that to move more people off the wait list for organ donations, surgeons and hospitals are developing a market for organ swapping. This is an example of a macroeconomics topic
Indicate whether the statement is true or false
As the price of labor increases relative to the price of capital, the firm will move to a more labor-intensive production method to minimize costs
Indicate whether the statement is true or false
Bartering is:
A. very efficient compared to using money. B. slightly inefficient compared to using money. C. just as efficient as using money. D. extremely inefficient compared to using money.