In a market with information asymmetry, gains from trade occur if:
A) the value of the good to the seller is greater than its value to the buyer.
B) the value of the good to the buyer is greater than its value to the seller.
C) the variable cost of producing the good is zero.
D) the opportunity cost of consuming the good is zero.
B
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The circular flow model is all of the following except
a. an abstraction from reality b. a model of two markets c. a model of two agents d. a simple economic model e. designed to aid policy makers
When net exports are negative,
a. exports are greater than investment b. depreciation is greater than net investment c. imports are greater than investment d. exports are greater than imports e. imports are greater than exports
The slope of the demand curve conveys all the useful information about elasticity
a. True b. False Indicate whether the statement is true or false
Firm A, Firm B, and Firm C are the exclusive producers of a satellite video technology that revolutionized television services. The companies have formed a cartel to limit production and fix prices to maximize profits for all members. In the given scenario, which of the following should be the ideal strategy for Firm A? a. Produce the agreed-upon quota while keeping track of the production
levels of the other members of the cartel. b. Produce less than the quota while raising its prices to keep demand high. c. Produce more than the quota while lowering its prices to capture a higher market share. d. Produce the agreed-upon quota while seeking to differentiate its product to capture a higher market share.