Which of the following would be an example of a transaction later regretted because it was made with incomplete information?
A. Sue purchased a lottery ticket that did not win her any money.
B. Larry moved to a new apartment but later decided it was too small for his needs.
C. Tim bought products from a seller that knew they were defective.
D. All of these are good examples of incomplete information.
C. Tim bought products from a seller that knew they were defective.
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Which of the following tools cannot be used by the government to maintain a fixed exchange rate?
A. rationing of foreign exchange B. currency market intervention C. controlling the flow of trade through various barriers D. keeping its level of international reserves strictly fixed
In 2002, President Bush imposed a tariff on imported steel. He did so in response to rent seeking by
A) domestic steel consumers. B) domestic steel producers. C) foreign steel consumers. D) foreign steel producers. E) foreign politicians.
If the price elasticity of demand for radios is 2.5 (dropping the minus sign), then a 50 percent reduction in the price of radios will lead to
A. the sale of 200 additional radios. B. the sale of 125 percent more radios than before. C. the sale of 150 percent more radios than before. D. the sale of 25 percent more radios than before.
Assume that the marginal propensity to consume out of disposable income is 0.8 and that the government taxes all income at a constant rate of 30%. If the gross income increases by $100, consumption will initially increase by
A) $44 B) $56 C) $70 D) $80 E) $100