The lemons problem is due to
A) asymmetric information.
B) moral hazard.
C) hidden actions.
D) symmetric information.
A
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Define the term normal good. How can a normal good be recognized from
(i) the Engel curve diagram, (ii) the income elasticity of demand, and (iii) the substitution and income effects of a price change?
When an economy dips into recession, automatic stabilizers will:
a. enlarge the budget deficit (or reduce the surplus). b. reduce the budget deficit (or increase the surplus). c. ensure that the budget remains in balance. d. expand the supply of money and, thereby, stimulate aggregate demand.
If too many high risk policyholders migrate to a comprehensive health insurance plan which covers a wide range of treatments, the price of a policy must increase
Indicate whether the statement is true or false
"Senior citizens deserve an income that will allow them to live in comfort for their remaining years." This is
a. neither a normative nor a positive statement b. both a positive and a normative statement c. strictly a macroeconomic issue d. a positive statement e. a normative statement