Question 1
Refer to the Economics in Practice on page 358. Sometimes the lack of information in an advertisement serves as a signal.
◦ true
◦ false
Question 2
Mechanism design is used to
◦ align the interests of two parties in a transaction.
◦ give individuals the incentive to reveal the truth about themselves.
◦ correct inefficiencies associated with asymmetric information.
◦ All of these are correct.