Reference no: EM1373790
If the seller knows more about the good than the buyer, there exists:
[A] an externality.
[B] asymmetric information.
[C] moral hazard
[D] a public goods problem
If the market for used computers has only lemons (low-quality computers) then the market:
[A] is an example of a thick market.
[B] suffers from an adverse selection problem.
[C] is a type of monopoly.
[D] must be monopolistically competitive
Adverse selection in employment is more likely when:
[A] jobs require specific training.
[B] everyone is equally qualified for the jo[B]
[C] people's abilities are easy to measure.
[D] people's abilities are difficult for potential employers to observe.
In a _____market there are few high-quality goods for sale while in a ____market there are many high-quality goods for sale.
[A] thin; thicker.
[B] thicker; thin.
[C] inefficient; efficient.
[D] weak; strong.
Assume buyers in the used car market are willing to pay $3,500 for a plum (high-quality) used car and $1,500 for a lemon (low-quality) used car. If buyers believe that 30 percent of the used cars on the market are lemons (low quality), what would they be willing to pay for a used car?
[A] $2000
[B] $2500
[C] $2900
[D] $3500
A market in which there are neither spillover benefits nor spillover costs is:
[A] efficient.
[B] in efficient.
[C] efficient but not equitable.
[D] impossible.
The discoveries from space exploration are examples of:
[A] private goods.
[B] external goods.
[C] public goods.
[D] spillover goods.
A college education generates:
[A] no benefits.
[B] only private benefits.
[C] only spillover benefits.
[D] both private and spillover benefits.
Arranging matching charitable contributors will______ the free-rider problem and lead to a _____ level of contribution to the public goo[D]
[A] increase; smaller.
[B] increase; larger.
[C] reduce; smaller.
[D] reduce; larger.
The theory of government that assumes that the goal of government is to make the government more efficient is called:
[A] public choice economics.
[B] the public interest view.
[C] the efficient markets hypothesis.
[D] the voter theory.
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