What is one kind of monopoly that the U.S. government generally permits?

The interest rate that banks charge other banks for loans is the

A) discount rate. B) prime rate. C) federal funds rate. D) Treasury bill rate.

Consider a used car market in which half the cars are good and half are bad (lemons). A rational buyer in this market should

A) save up and buy a new car. B) offer to pay a price equal to the most she would pay for a good car. C) offer to pay a price equal to the most she would pay for a lemon. D) offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon.