Used car buyers believe a car is good quality when the seller signals the car's quality by offering a warranty because
A) car sellers would never lie.
B) car buyers are gullible.
C) the signal cannot be false.
D) a false signal can be costly to the seller.
Ques. 2Jenny's weekly income increases from 500 to 650. As a result, she goes out for dinner one day a week instead of one day every other week. What is Jenny's income elasticity of demand for restaurant dinners?
What will be an ideal response?
Ques. 3In an indifference curve/budget line diagram, generally when the price of a good increases, the consumer purchases ________ of the good and moves to a ________ indifference curve.
A) less; lower
B) less; higher
C) more; lower
D) more; higher
Ques. 4In a perfectly competitive market that is in long-run equilibrium, which of the following will NOT occur?
A) Firms make only zero economic profit.
B) Firms' owners earn a normal profit.
C) The price equals the minimum average total cost.
D) Entrepreneurs want to enter this industry.
Ques. 5Consider the monopsony in the above figure. The monopsony will pay a hourly wage rate equal to
A) 10.
B) 15.
C) 20.
D) None of the above answers is correct.
Ques. 6Using the data in the above table, the average fixed cost of producing 16 units is
A) 1.11 a unit.
B) 1.25 a unit.
C) 1.54 a unit.
D) 2.22 a unit.
Ques. 7What is resale price maintenance? Is resale price maintenance legal in the United States?
What will be an ideal response?
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