The increase in the share of loans extended to borrowers with little or no down payment contributed to the financial crisis of 2008 because these loans
a. initially depressed housing prices.
b. were extended only to borrowers with prime credit status.
c. had much higher default rates than loans to borrowers making larger down payments.
d. were unavailable to low-income borrowers, who would have profited the most from such loans.
C
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Suppose the current equilibrium price of pizza is $5 . If the government decides the price of pizza cannot rise above $4, the result of this policy would be
a. a shortage b. a surplus c. that the market would remain in equilibrium but with a larger quantity bought and sold than at $5 d. at the $4 price, the quantity sold would be greater than the quantity bought e. a shift of demand to the right
In an oligopoly with a collusive agreement, the total industry profits will be smallest when
A) all firms comply with the agreement. B) one firm cheats on the agreement and the other firms do not cheat. C) all firms cheat on the agreement. D) the firms act as a monopoly.