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
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Over the past 110 years, real GDP per person in the United States has grown at an average rate of about ________ per year
A) 1 percent B) 2 percent C) 5 percent D) 10 percent E) 7.5 percent
Adverse selection occurs in the used car market because:
A. the seller has more information than the buyer. B. the buyer has more information than the seller. C. both the buyer and the seller have incomplete information. D. Any of these could be the cause of adverse selection in the used car market.
A subsidy to buyers has been placed on the market in the graph shown. What is the amount of the subsidy per unit of this good?
A. $22
B. $16
C. $10
D. $6
Explain the prisoner’s dilemma case in game theory and its relevance to the maximin criterion.
What will be an ideal response?