Recall the Application about the free-agent market for professional baseball pitchers to answer the following question(s).Recall the Application. The market for baseball pitchers suffers from an asymmetric information problem because:
A. the pitcher's current team has superior information concerning the health of the pitcher.
B. the potential new teams have superior information concerning the health of the pitcher.
C. baseball teams never sign injury-prone pitchers.
D. a physical exam ensures that both the player's current team and potential new teams have the same information concerning the player's health.
Answer: A
You might also like to view...
Research demonstrates that elections can be swayed by factors other than the rational policy considerations of well-informed voters, such as:
A. handshaking. B. mudslinging. C. eating food at a county fair. D. All of these can sway a vote.
If the market for a good or service is competitive,
a. there are many independent buyers and sellers b. buyers and sellers have no control over price c. there are no entry barriers d. all of the above
Suppose you deposit $2,000 into Bank of America and that the required reserve ratio is 10 percent. How does this affect the bank's balance sheet?
A) Required reserves rise by $2,000. B) Excess reserves rise by $1,800. C) Reserves rise by $200. D) Deposits rise by $1,000.
Which of the following factors contribute to economic growth?
a. a decline in the stock of physical capital b. the discovery of new oil reserves c. a decrease in the productivity of labor d. a decrease in the quantity of labor due to emigration