When the price of a good in a market is above equilibrium:
a. the quantity supplied exceeds the quantity demanded.
b. a surplus is observed
c. the price will fall in the near future.
d. all of the above.
d
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Which of the following is an example of a black market activity?
a. Purchasing banned drugs from an individual in a vacant lot b. Purchasing drugs from a pharmacy c. Purchasing automobiles from an authorized dealer d. Purchasing stocks and bonds
Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute. B. one party selects the wrong strategy and they are displeased with their selection. C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry. D. neither party is willing to be party to a transaction because they don’t have enough information.