The "lemons problem" exists because of
A) transactions costs.
B) economies of scale.
C) rational expectations.
D) asymmetric information.
D
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Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10 . The marginal product of the seventh unit of labor is 4 . Given this information, what is the marginal cost of production when the firm hires the 7th
worker? a. $1.50 b. $2.50 c. $5 d. $10
Refer to the table. Suppose that the United States imports more products from Luteland than before. All else equal, the dollar price of luta will:
Answer the question on the basis of the following table, which indicates the dollar price of luta, the currency used in the hypothetical economy of Luteland:
A. rise and the dollar will depreciate.
B. fall and the dollar will depreciate.
C. rise and the dollar will appreciate.
D. fall and the dollar will appreciate.