Whenever there is adverse selection without signaling or screening, there will be a missing market.
Answer the following statement true (T) or false (F)
True
Rationale: If no attempt is made to uncover information, markets will be missing in the sense that either a pooling equilibrium emerges (with markets targeted at individual types missing) or, in a separating equilibrium, a restricted output choice is offered to low cost types in order to keep high cost types from buying in the low cost market.
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Cost minimization requires that a firm equate the ratio of marginal products of inputs to the ratio of input prices.
Answer the following statement true (T) or false (F)
The output gap of zero indicates that
A) nominal GDP is equal to Real GDP. B) GDP is equal to GNP. C) the balance between unemployment and inflation has been reached. D) actual real GDP is equal to natural real GDP.
The PDV of a perpetuity with a yearly payment of $500 at an interest rate of 5% is
A) $100. B) $5,000. C) $25,000. D) $10,000. E) $100,000.
Most Social Security benefits go to people who are not poor
Indicate whether the statement is true or false