Pat goes to the local electronics store to learn about high-end audio equipment. The salesperson spends an hour talking with Pat and demonstrating equipment. Pat then leaves and orders an audio system on the Internet for $250 less than the price at the store. Pat's behavior:
A. illustrates the free-rider problem.
B. illustrates the problem of adverse selection.
C. is illegal.
D. is a form of statistical discrimination.
Answer: A
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If there is shortage of loanable funds, then
a. the supply for loanable funds shifts right and the demand shifts left. b. the supply for loanable funds shifts left and the demand shifts right. c. neither curve shifts, but the quantity of loanable funds supplied increases and the quantity demanded decreases as the interest rate rises to equilibrium. d. neither curve shifts, but the quantity of loanable funds supplied decreases and the quantity demanded increases as the interest rate falls to equilibrium.
In the Edgeworth box shown below, 
A. the relative prices shown will bring equilibrium without changing. B. there is more clothing demanded than is available. C. there is more food demanded than is available. D. there is less food demanded than is available.