« previous next »

Author Question: What is meant by imperfect information? What will be an ideal ... (Read 26 times)

swpotter12

  • Hero Member
  • *****
  • Posts: 527
on: Jun 29, 2018
What is meant by imperfect information?
 
  What will be an ideal response?

Question 2

Explain how the market for gasoline would react to this price ceiling if a global shortage of oil sent the equilibrium price of gasoline to 3.50 a gal-lon. Would the U.S. gasoline market be efficient?
 
  What will be an ideal response?


peter

  • Sr. Member
  • ****
  • Posts: 330
Reply #1 on: Jun 29, 2018
Answer to Question 1

Imperfect information is the absence of full knowledge regarding product characteristics, available prices, and so forth.

Answer to Question 2

If the equilibrium price of gasoline is 3.50 a gallon, then a price ceiling of 3.00 a gallon results in a shortage. The quantity of gasoline demanded at 3.00 a gallon exceeds the quantity supplied. A black market is likely to develop, in which consumers buy gasoline at prices higher than the price ceiling. In addition, a great deal of additional search activity arises as drivers look for gas stations that are open and willing to sell gasoline. The market is inefficient because the marginal benefit of a gallon of gasoline exceeds the marginal cost and so there is a deadweight loss.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

If you use artificial sweeteners, such as cyclamates, your eyes may be more sensitive to light. Other factors that will make your eyes more sensitive to light include use of antibiotics, oral contraceptives, hypertension medications, diuretics, and antidiabetic medications.

Did you know?

The Romans did not use numerals to indicate fractions but instead used words to indicate parts of a whole.

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Information flows from the nucleus to the cytoplasm and back. Information flows from the nucleus to the cytoplasm and back.
Sharing patient information with colleagues is an important nursing role Sharing patient information with colleagues is an important nursing role
The NIOSH Pocket Guide entry for gasoline. Useful information includes health effects and chemical ... The NIOSH Pocket Guide entry for gasoline. Useful information includes health effects and chemical ...
Food Labels Provide Nutrient Content Information Food Labels Provide Nutrient Content Information
Fluency with Information Technology: Skills, Concepts, and Capabilities Fluency with Information Technology: Skills, Concepts, and Capabilities
8.The following table contains DNA-sequence information compiled by Marilyn Kozak (1987). The ... 8.The following table contains DNA-sequence information compiled by Marilyn Kozak (1987). The ...
Video: Osmosis - Isotonic, Hypotonic, and Hypertonic​ Solutions

For a complete list of videos, visit our video library