If sellers of good cars and sellers of lemons both offer a warranty on their cars, consumers will then be able to tell which cars are the lemons
Indicate whether the statement is true or false
False. The lemon owners are sending a false signal that consumers cannot detect. There is still nothing to distinguish a lemon from a good car.
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An establishment survey is used to calculate
A) the unemployment rate. B) the level of payroll employment. C) both the unemployment rate and the level of payroll employment. D) neither the unemployment rate nor the level of payroll employment.
In a principal-agent problem, if the contract used leads to the maximum of the principal's and agent's combined value (profits, payoffs), we can say that this contract features
A) inefficiency in production, since only the principal's profits should be maximized. B) inefficiency in production, since only the agent's payoffs should be maximized. C) efficiency in production. D) inefficiency in production, since the agent's payoffs should be maximized and the principal's profits should be minimized.
The practice by a monopolist of charging each buyer the highest price he/she is willing to pay is called
A) first-degree discrimination. B) second-degree discrimination. C) third-degree discrimination. D) fourth-degree discrimination.
You own an ice cream store and are concerned that an employee may be giving generous scoops to friends and relatives and smaller scoops to some other customers. This is an example of
a. a moral hazard problem. b. adverse selection. c. behavioral economics. d. signaling.