Author Question: John wants to buy a new lawn mower. He can either buy it in the US and pay 500 or buy it in Mexico ... (Read 158 times)

bobbysung · **on:** Jul 1, 2018

John wants to buy a new lawn mower. He can either buy it in the US and pay 500 or buy it in Mexico and pay 8188 Mexican Pesos. At the exchange rate of 1 Mexican Peso=0.771US, ignoring any other costs, he would
a. Prefer buying in the US
b. Prefer buying in Mexico
c. Be indifferent about where he buys his television
d. None of the above

Question 2

Adverse selection is caused by
a. Hidden actions
b. Hidden information
c. Both of the above
d. None of the above