Contracting for Lawn Mowing Services An apartment owner advertises for lawn mowing services for a number of apartments he owns. He has some idea of the going price and so he advertises that he will pay $100 per month per apartment complex. So why is he disappointed that the winning contractor only provides minimal services?
He has fallen victim to adverse selection. The scope of services offered by lawn service companies differs from the most basic to elaborate manicuring. Because he stated a price he is willing to pay, the only offers he receives are the lower cost, more basic services.
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________ is fixed when moving along the aggregate supply curve
A) The real wage rate B) Real GDP C) Employment D) The price level E) The money wage rate
Suppose that in an industry, firm X has 50 percent market share, firm Y has 35 percent market share, and firm Z has 10 percent market share. Which of the following mergers is NOT likely to be challenged by the Federal Trade Commission?
A) a merger between firms X and Y B) a merger between firms Y and Z C) a merger between firms X and Z D) Any merger of two firms among those firms is likely to be challenged.
The exchange rate last month was $1 = 1.15 euros. This month it is $1 = 1.35 euros. We can say that the value of the dollar
A) fell; causing net exports to increase and aggregate demand to rise. B) fell; causing net exports to decrease and aggregate demand to fall. C) increased; causing net exports to decrease and aggregate demand to fall. D) increased; causing net exports to decrease and aggregate demand to rise.
Assuming the market is in equilibrium in the graph shown with demand D and supply S2 at a quantity of 8, consumer surplus is:
A. $32.
B. $11.
C. $7.
D. equal to the producer surplus.