In order to identify their used cars as plums (high-quality), many used car dealers:
A. raise the minimum price of plums (high-quality).
B. advertise their prices.
C. offer money-back guarantees.
D. raise the minimum price of lemons (low-quality).
Answer: C
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If producers who hire labor in a competitive labor market decide to purchase the new automated machine that completes the work of 30 employees, we would expect the:
A. labor-supply curve in that market to shift left. B. labor-demand curve in that market to shift left. C. labor-supply curve in that market to shift right. D. labor-demand curve in that market to shift right.
If a competitive firm is operating at its efficient scale, then is the firm's profit positive, zero, or negative?
Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below.Hours in East OrchardNumber of Apples Per HourHours in West OrchardNumber of Apples Per Hour140110232210325310420410 How should Frank divide his time between the east and the west orchard?
A. He should spend all 4 hours in the east orchard. B. He should spend 3 hours in the east orchard and 1 hour in the west orchard. C. He should spend 1 hour in the east orchard and 3 hours in the west orchard. D. He should spend 2 hours in east orchard and 2 hours in the west orchard.
Whether crowding out occurs is most likely to depend on:
A. the timing of fiscal policy. B. whether there is full employment in the economy. C. the political business cycle. D. whether the actions of state governments are procyclical.