Author Question: If an Engel curve has a negative slope, A) the good is inferior. B) the good is normal. C) ... (Read 113 times)

vicotolentino · **on:** Jul 1, 2018

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.

Question 2

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 to sell a low-quality car at all. Without it no one would risk buying the car.
D) isn't necessary if there is a mix of high-quality and low-quality cars in the market.
E) helps sellers determine whether the buyer is truly looking for a high-quality car.