Consider a used car market in which half the cars are good and half are bad (lemons). Suppose the average price of a good car is $9,000 and the average price of a lemon is $3,000. If rational buyers are willing to pay $6,000 for a used car, then sellers
will agree to sell mostly lemons at this price. What is the term used to describe this situation?
A) moral hazard
B) adverse selection
C) an efficient market
D) economic irrationality
Answer: B
Economics
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In the figure above, with international trade American consumers buy ________ million shirts per year
A) 48 B) 32 C) 16 D) 24
Economics
Based on the data in the table above, at the short-run equilibrium
A) the unemployment rate is less than the natural unemployment rate. B) the unemployment rate is greater than the natural unemployment rate. C) the money wage rate will rise in the long run. D) the economy is at full employment.
Economics