Using the simple supply and demand model for the information market, show what the full disclosure principle does to the market. Start from an equilibrium point and apply the concept.
What will be an ideal response?
The person with the information is more willing to offer the information and make a full disclosure. This makes it easier to get information and, in effect, shifts the supply of information curve to the right. Thus more information is obtainable at a lower cost.
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Which of the following best defines positive externalities?
a. Beneficial spillovers to a third party b. Monetary benefits to stakeholders c. Dollar values of societal benefits d. Rates of return for innovators
About what percent of total world trade is accounted for by countries that belong to the World Trade Organization?
a. 54 percent b. 72 percent c. 89 percent d. 97 percent
Suppose that an accounting firm with 10 employees hires another accountant. By doing so, it goes from serving 30 customers each week to serving 32 customers each week. What is the marginal product of labor for the new accountant?
A. 2 B. 10 C. 32 D. 62
Use the following list of modern macroeconomic theories in order to describe the following statement: Lower tax rates and less government intervention in the private economy is the only way to stimulate saving, investment, and productivity.
A. Monetarism B. The theory of rational expectations C. New classical economics D. Supply-side economics