CARFAX is a company that compiles and sells histories of used cars. CARFAX reduces the:
A. number of cars exchanged in the used car market.
B. information asymmetry in the used car market.
C. number of used cars offered for sale in the market.
D. cost of used cars in the market.
Answer: B
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Answer the following statements true (T) or false (F)
1) In general, if two stages in a supply chain are making an economic profit by setting prices that exceed their marginal cost of production, managers can increase profit through vertical integration. 2) Because vertical integration is a yes or no decision, managers cannot use marginal analysis. 3) If a firm has a monopoly in both the production and distribution, managers of the two divisions should be encouraged to maximize profits in their separate divisions. 4) If a firm has a monopoly in both the production and distribution, to maximize the overall economic profit of the firm, managers of either the production or distribution center should be instructed to maximize profit and the managers of the other center should be instructed to operate as a competitive market. 5) Vertical integration can eliminate double marginalization.
A credit item on the U.S. balance of payments is an item that
a. makes U.S. dollars available to foreigners. b. causes foreigners to use up their U.S. dollars. c. is like an import. d. requires the use of official researchers to offset deficits.
To maximize profit, a competitive firm hires workers up to the point of intersection of the
a. marginal product curve and the wage line. b. value of marginal product curve and the wage line. c. value of marginal product curve and the marginal revenue curve. d. total revenue curve and the wage line.
Supply is best defined as the:
A) relationship between the quantity of a good or service buyers are able to purchase, all other things unchanged. B) relationship between the quantity of a good or service buyers are willing to purchase, all other things unchanged. C) relationship between the quantity of a good or service sellers are willing to offer for sale and various prices, all other things unchanged. D) quantity of a good or service sellers are willing to offer for sale at a specific price, all other things unchanged.