State one reason why government intervention may not be a good solution to an asymmetric information problem
Possible answers :
1 . The private market can sometimes deal with information asymmetries using signaling and/or screening.
2 . The government rarely has more information than the private parties.
3 . The government itself is an imperfect institution.
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An rational, optimizing, self interested consumer would consume up to the point where
a. the consumer surplus from the last unit is positive b. the consumer surplus from the last unit is negative c. the consumer surplus from the last unit is zero d. none of the above
Countries with high labor costs tend to:
a. rely on only one method for the production of goods b. use more labor rather than capital in the production process. c. use more capital rather than labor in the production process. d. be relatively poor countries.
To maximize profit, a competitive firm hires workers up to the point of intersection of the
a. marginal product curve and the wage line. b. value of marginal product curve and the wage line. c. value of marginal product curve and the marginal revenue curve. d. total revenue curve and the wage line.
Suppose your utility function is given by 
. What is your demand function for 
?
What will be an ideal response?