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. If buyers believe that 50% of used refrigerators in the market are lemons (low quality), what fraction of used refrigerators sold will actually be lemons (low quality)?
A. 50/250
B. 50/300
C. 250/300
D. All of the refrigerators sold will be lemons.
Answer: C
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Developing new products and services as well as introducing new production methods are among the ways that ________ increases average labor productivity.
A. an entrepreneur B. physical capital C. a manager D. human capital
In the above figure, curve b shows the
A) bottles of soda that people are willing to forgo to get another bicycle. B) bottles of soda that people must forgo to get another bicycle. C) benefits of producing more bicycles is greater than the benefits of producing more soda. D) benefits of producing more soda is greater than the benefits of producing more bicycles.
A monopolist finds the output (Q*) rate that maximizes profit. It finds the price by
A) taking the height of the marginal revenue curve at output rate Q*. B) taking the height of the marginal cost curve at output rate Q*. C) taking the height of the demand curve at output rate Q*. D) setting price equal to marginal cost.
An official agreement with another country to restrict the quantity of its exports to the U.S. is
A) a regional trade bloc. B) the quota system. C) a voluntary import expansion. D) a voluntary restraint agreement.