Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 5, Problem 8CQ
To determine
Identify whether the given statement is true or false.
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Unless quality and price are regulated by government, travelers would have no chance for a fair deal. Local people would be treated well, but the traveler would have no way to know, for example, who offers a good night's lodging at a fair price." Is this true or false? Explain.
Why does a seller with a good reputation face a different opportunity cost foroffering poor-quality goods than a seller with no reputation to lose?
Which of the following explains why a seller might charge a high price when a new video game console is first released and then lower the price as time goes by?
Select one:
a. The buyers want to buy the new video game console only if the price is high because a high price signals good quality.
b. The seller wants to test the market to see how consumers react to the product.
c. The seller has to sell the newly released video game console at the government-mandated price.
d. The seller can charge a high price to consumers who want to be the first ones to own a newly released product.
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Economics: Private and Public Choice (MindTap Course List)
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- How to regulate price increases in agricultural products especially during special occasions?arrow_forwardGive an example of supply and demand market price changes have experienced or have learned about through the news media during or after a hurricane, typhoon, tsunami, fire, flood, mudslide, earthquake, or other natural disaster. If prices went up, did you think it was fair? Did you think it was ethical? If you did not personally experience the disaster, put yourself in the shoes of someone who did, and answer the questions hypothetically.arrow_forwardWhat public policy approach would be most reasonable to protect consumers from harmful products? How might market and economic forces play a role in protecting consumers?arrow_forward
- There is a market for second-hand cars. There are 100 good cars and 100 bad cars, and there are 200 sellers and 200 buyers. A seller values a good car 400 dollars and bad car 200$. A buyer values good cars for 500$ and bad car for 250$. How many cars will be exchanged for which price?arrow_forwardDescribe what would happen to the equilibrium price of marijuana if it were legalized.arrow_forwardSeveral years ago, hurricane Gilbert destroyed thousands of acres of banana in St Vincent . Farmers whose crops were destroyed by the hurricane were much worse off, but farmers whose crops were not destroyed benefited from the hurricane. Why did this occur? What information would you need about the market for bananas in order to assess whether farmers as a group were hurt or helped by the floods?arrow_forward
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- In much of Europe, the legal age to obtain a driver's license is 18. If the legal driving age in the United States was changed to 18, how would this affect the market for new automobiles? The market for automobile insurance?arrow_forwardServices are perishable, which means they cannot be stored or inventoried. What attempts might a university or college make to 'shift' both the supply (when needed during busier times) and the demand (to non-peak times) in order to balance the supply and demand for its services?arrow_forwardSeveral years ago, hurricane Gilbert destroyed thousands of acres of banana in Jamaica. Farmers whose crops were destroyed by the hurricane were much worse off, but farmers whose crops were not destroyed benefited from the hurricane. Why did this occur? What information would you need about the market for bananas in order to assess whether farmers as a group were hurt or helped by the floods?Explain that in detail using graphs .arrow_forward
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