When consumers cannot tell the difference at the time of sale between high-quality products and those with defects, strong sales of the low-quality products will tend to depress price and drive the high-quality products from the market. Economists call this

An argument in favor of fractional-reserve banking is that

A) unregulated institutions would be riskier than regulated fractional-reserve banks. B) it increases the precision of the central bank's control over the quantity of money. C) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else. D) it decreases the risk of a bank running out of cash.

The demand for bus rides is a downward-sloping straight line demand curve. The price elasticity of demand for bus rides ________

A) increases as the price of a bus ride falls B) decreases as the price of a bus ride falls C) is the same no matter what the price of a bus ride D) decreases as the price of a bus ride rises