That most used cars are sold by intermediaries (i.e., used car dealers) provides evidence that these intermediaries
A) have been afforded special government treatment, since used car dealers do not provide information that is valued by consumers of used cars.
B) are able to prevent potential competitors from free-riding off the information that they provide.
C) have failed to solve adverse selection problems in this market because "lemons" continue to be traded.
D) have solved the moral hazard problem by providing valuable information to their customers.
B
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The assumption that given the strategy chosen by the other participant, a player will always choose the strategy that brings him or her the best payoff is called
A) strategic interaction. B) economic self interest. C) the rationality assumption. D) the profit-maximizing assumption.
American companies can borrow funds
A) only in U.S. financial markets. B) only in foreign financial markets. C) in both U.S. and foreign financial markets. D) only from the U.S. government.
According to the labor statistics of the United States, the _____ reported the highest unemployment rate between 1960 and 2008
a. Whites b. Asians c. African Americans d. Hispanics e. Latinos
The circular flow model:
a. Illustrates the interdependence of businesses and consumers b. Assumes that central planning is taking place c. Illustrates how natural resources are created d. Illustrates how money is created by the banking system