Generalizing using statistical discrimination is:
A. a rational response to being on the wrong end of an information asymmetry.
B. a rational response, although government always steps in to prevent it.
C. an irrational response and always leads to loss of surplus.
D. All of these statements are true.
Answer: A
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Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s. Under these circumstances, the increase in the price of Coke occurs as a result of a(n): a. decrease in supply. b. decrease in demand. c. increase in supply
d. increase in demand.
It can take many months or even more than a year to begin a(n) _______________ fiscal policy after a recession has started.
a. contractionary b. exploratory c. aggressive d. expansionary
In the short run, a perfectly competitive firm will always shut down if total revenue is ____ at all positive output levels
a. less than total cost b. less than total cost but greater than variable cost c. less than total cost but greater than fixed cost d. greater than fixed cost e. less than variable cost
As the price level falls, the value of money falls
a. True b. False Indicate whether the statement is true or false