If a buyer or seller enters into an exchange with another party who has more information, there is
A. symmetric information and moral hazard.
B. a negative externality imposed.
C. asymmetric information and adverse selection.
D. a free-rider problem.
Answer: C
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Along a straight-line demand curve (dropping all minus signs), the price elasticity of demand
A. gets larger as quantity demanded gets larger. B. gets smaller as quantity demanded gets larger. C. always equals one. D. is constant (though not necessarily equal to one).
The 2009 fiscal stimulus package was passed ________
A) to prevent the real interest rate from rising B) to shift the IS curve to the left C) to raise aggregate output at any interest rate D) all of the above E) none of the above
The graph shown demonstrates a tax on buyers. Before the tax was imposed, the sellers produced ________ units and received __________ for each one sold.
A. 6; $22
B. 6; $34
C. 9; $18
D. 9; $30
As the market price of a good falls, consumer surplus: a. falls
b. rises. c. does not change. d. can either fall, rise, or stay the same.