A consumer values a car at 525,00 . and a producer values the same car at 485,000 . If sales tax is 8 and is levied on the buyer, then the buyers top dollar price is
a. 525,000
b. 523,800
c. 485,000
d. 486,111
QUESTION 2Holding other things constant, an increase in the inflation rate in the US compared to China may cause the demand for dollar to _____________ and the supply for dollar to __________.
a. Increase; decrease
b. Increase, increase
c. Decrease; Increase
d. Decrease; Decrease
QUESTION 3The following is an example of adverse selection
a. A majority of those applying for well paid jobs are well qualified
b. More reckless drivers opt for cars with fewer safety devices
c. Individuals living in less secure neighborhoods want to buy less insurance
d. Individuals with a strong family history of heart diseases opt to buy more insurance
QUESTION 4A consumer values a car at 525,00 . and a producer values the same car at 485,000 . If sales tax is 8 and is levied on the seller, then the sellers bottom line price is
a. 527,000
b. 523,800
c. 525,000
d. 500,000
QUESTION 5Holding other things constant, an appreciation of the US Dollar relative to the Chinese Yuan causes the demand for the Yuan to _____________ and the supply for Yuan to __________.
a. Increase; decrease
b. Increase, increase
c. Decrease; Increase
d. Decrease; Decrease
QUESTION 6The following is an example of adverse selection
a. A majority of those applying for well paid jobs are well qualified
b. More reckless drivers opt for cars with fewer safety devices
c. Individuals living in less secure neighborhoods want to buy more insurance
d. Individuals with a strong family history of heart diseases opt to buy less insurance
QUESTION 7A consumer values a car at 525,00 . and a producer values the same car at 485,000 . If the transaction is completed at 510,000 . what level of tax rate will result in unconsummated transaction?
a. 1
b. 5
c. 3
d. 2
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