A bumper-to-bumper warranty on a used car is a signaling device that A) identifies a high-quality car as a high-quality car, because putting such a warranty on a low-quality car would be prohibitively costly. B) disguises a low-quality car as a high-quality car, and thus makes it easier to sell. C) is necessary in order […]
If an Engel curve has a negative slope, A) the good is inferior. B) the good is normal. C) the good has no substitutes. D) the good has no complements. ANSWER A
What is true about dominant strategies in the game in Scenario 13.10? A) “Use more caffeine” and “have a sweepstakes” are dominant strategies. B) “Use more caffeine” and “create a diet soda” are dominant strategies. C) “Make animal-shaped bottles” and “have a sweepstakes” are dominant strategies. D) “Make animal-shaped bottles” and “create a diet soda” […]
The best single indicator of a person’s purchasing power over time is income. Indicate whether the statement is true or false ANSWER T
It is enough to show just that the poor have different behavior to confirm the culture of poverty hypothesis. Indicate whether the statement is true or false ANSWER F
Refer to Scenario 10.2. How much profit does the monopolist earn? A) $4512.50 B) $4987.50 C) $475.00 D) $5.00 ANSWER A
Refer to Scenario 10.2. What is the profit maximizing level of output? A) 0 B) 90 C) 95 D) 100 E) none of the above ANSWER C
A bond has a current market value of $800. The holder of the bond will receive a single payment of $1,000 one year from now. The interest rate is 10 percent. The effective yield on the bond is: A) $200. B) 10 percent. C) 25 percent. D) negative. E) The yield cannot be determined with […]
Since the specification of a poverty standard is an imprecise endeavor, it is a useless exercise. Indicate whether the statement is true or false ANSWER F
The poor, in considering a job offer, face constraints that middle-class job seekers are not subject to. Indicate whether the statement is true or false ANSWER T
