Used car buyers will believe that a car is of good quality when the seller signals the car's high quality by offering a warranty when
A) a warranty on a lemon is costly to the seller.
B) warranties are offered on all cars.
C) warranties are only offered on lemons.
D) a warranty on a good car is a false signal.
A
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Hewlett-Packard will not raise the prices of its personal computers without first considering how Dell might respond. This is evidence of
A) collusion. B) cutthroat competition. C) price fixing. D) interdependence.
The demand curve faced by a perfectly competitive firm
a. is the market demand curve b. slopes downward c. is perfectly elastic d. is vertical e. rises when market supply rises
In the short-run macro model, adjustment toward equilibrium is facilitated by price changes
a. True b. False
The market basket that is used by the Bureau of Labor Statistics to calculate prices is made up of which of the following?
(A) Food items only. (B) Typical goods and services for an urban household. (C) Nonfood items only. (D) Food and necessary services for any family.