Which of the following relationships involves asymmetric information?
a. A recruiter for a college football team evaluates the performance of a high-school player.
b. A loan applicant knows more about the likelihood her business will be successful than the loan officer.
c. Someone considering buying running shoes looks at a number of online reviews by buyers.
d. All of the above are correct.
Answer: b. A loan applicant knows more about the likelihood her business will be successful than the loan officer.
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Answer the next question on the basis of the following production possibilities tables for two countries, Latalia and Trombonia:Latalia's Production Possibilities ABCDEPork (tons)43210Beans (tons)05101520Trombonia's Production Possibilities ABCDEPork (tons)86420Beans (tons)06121824If these two nations specialize on the basis of comparative advantage
A. Trombonia will produce beans and Latalia will produce pork. B. Latalia will produce beans and Trombonia will produce pork. C. Trombonia will produce both beans and pork. D. Latalia will produce both beans and pork and Trombonia will produce neither.
Early adopters are consumers who will pay a high price to be among the first to own new products
Indicate whether the statement is true or false
In what way does this map serve as an abstraction?
Zoom out to the highest level. How does this affect the level of abstraction? When would each type of map be most useful? Generalize this argument by discussing the level of abstraction needed for alternative economic models.
The law of diminishing marginal utility indicates that the slope of the marginal utility curve eventually becomes:
a. negative b. vertical c. horizontal d. positive