Consider a market in which high-quality and low-quality ...

[justinmsk]

Consider a market in which high-quality and low-quality television sets are sold. Before consumers make a purchase, they do not know the quality of the sets, but the sellers do know.
 
  As compared to a situation where both consumers and sellers know the quality of the sets, this situation would A) cause no change in the ratio of low to high-quality sets sold.
  B) increase the fraction of high-quality sets sold.
  C) increase the fraction of low-quality sets sold.
  D) cause the average price of goods sold to rise.

Question 2

Consider a good whose own price elasticity of demand is -0.5 and price elasticity of supply is 1.5. The fraction of a specific tax that will be passed through to consumers is ________.
 
  A) 0
  B) 0.25
  C) 0.5
  D) 0.75
  E) 1

[juliaf]

Answer to Question 1

C

Answer to Question 2

D

[justinmsk]

Excellent

Gracias!