Microeconomics:
a. provides an overall view of the economy and how it functions
b. explores the behavior of individual consumers and firms when confronted with scarcity.
c. examines the aggregate behavior of consumers and firms when confronted with scarcity.
d. is a "positive" science, whereas macroeconomics is a "normative" science.
b
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Consumption spending includes spending on:
A. durables, nondurables, and services. B. goods and services by federal, state, and local governments. C. capital goods, residential housing, and changes in inventories. D. stocks, bonds, and other financial instruments.
A seller's verbal assurance that a used car is a plum (high-quality car):
A. is not effective at reducing the problems associated with asymmetric information. B. is an effective way for sellers to prove that the good they are selling is of high quality. C. is a more efficient way to prove high quality than a money-back guarantee because it does not cost the seller any money to make the assurance. D. provides the same protection against adverse selection than does a repair guarantee.