Questions from General Economics

Q: 4.1. In the market for insurance, the moral

4.1. In the market for insurance, the moral-hazard problem is that encourages . 4.2. While shopping for office equipment, an office manager sees a display of fire extinguishers. After maki...

Q: 2.1. Consider a thin used-car market.

2.1. Consider a thin used-car market. Someone just developed a device that can instantly identify the nearest plum in a used-car lot. The device works only once. The maximum amount that a consumer wou...

Q: 5.1. The reservation price is the price at which

5.1. The reservation price is the price at which the consumer is about additional search, meaning that the of search equals the . 5.2. If a consumer knows that TV...

Q: 1.1. Suppose 2,000 people would each get

1.1. Suppose 2,000 people would each get a benefit of $60 from a bridge. Building the bridge is socially efficient if its cost is less than $ . If the cost is $80,000, a tax of $ per pers...

Q: 2.1. A fire extinguisher is an example of a

2.1. A fire extinguisher is an example of a (n) good with a (n) benefit. 2.2. Education generates three types of external benefits: , , and . 2....

Q: 2.1. The relationship between the quantity of output produced

2.1. The relationship between the quantity of output produced and the quantity of inputs used to produce it is called the __________. 2.2. Which of the following would be counted as part of the stock...

Q: 6.1. The short-run supply curve is steeper

6.1. The short-run supply curve is steeper than the long-run supply curve because of the principle of . 6.2. Arrows up or down: Suppose the demand for shirts increases. In the short run, t...

Q: 3.1. Consider a market with two firms managed by

3.1. Consider a market with two firms managed by Harry and Vera. Under a cartel (both firms pick the high price), each firm earns a profit of $80. Under a duopoly (both firms pick the low price), each...

Q: 5.1. A pollution tax on automobiles provides an incentive

5.1. A pollution tax on automobiles provides an incentive to buy , maintain , drive , and use alternative . 5.2. Arrows up or down: A gasoline tax will shift the su...