You have just graduated from college and are buying a brand new car. There are two on the lot: a green one and a blue one. Both have the same features for the same price. Is there a potential asymmetric information problem?
What will be an ideal response?
No, in this case both you and the seller know the same amount about both cars. While it is possible that one of the cars is a lemon and the other is a plum, they may also both be lemons (low quality) or both plums (high quality). The important thing is that neither one of you knows the true quality of either car, so there is no asymmetric information problem.
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During the era from 1880 to 1920, the U.S. economy experienced a rise in big business, an expansion in industry and increased concentration in both
Indicate whether the statement is true or false
Government can intervene in the market through
a. Price floors b. Price ceilings c. Taxes d. All the above
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Eric, a resident of Sweden, purchases a book printed in the U.S. Which country's exports increase?
a. Sweden's
b. the U.S.'s
c. Sweden's and the U.S.'s
d. neither Sweden's nor the U.S.'s