Signaling is important because:
a. it increases social benefits associated with public goods
b. it decreases external costs associated with externalities.
c. it reduces information costs associated with asymmetric information.
d. all of the above
c
You might also like to view...
When money supply __________, the real rate of interest __________
A) increases; falls B) increases; rises C) decreases; rises D) increases; remains unchanged
The demand equation for the Widget Company has been estimated to be:
Q = 20,000 + 10 I - 50P + 20 PC where Q = monthly number of widgets sold, I = average monthly income, P = price of widgets, and PC = average price of competing goods. a. If next month's income is forecast to be 2,000, the price of competing goods is forecast to be $20, and the price of widgets will be set at $30, forecast sales. b. What will sales be if the price is dropped to $20?
Which of the following are qualifications of the Coase Theorem?
a. technical transaction costs must remain low and be unaffected if liability assignment is reversed b. both parties must operate in a purely competitive market c. one party quickly makes an offer the other is just willing to accept only when the information regarding payoffs is complete, certain and known to both parties d. all of the above are correct e. only a and c
If the economy is in recession and the number of used baby clothing stores increases, then used baby clothes
a. are a necessity b. are an inferior good c. are a normal good d. are a luxury e. have price-elastic demand