In the market for used cars, if buyers and sellers have perfect ...

[asmith134]

In the market for used cars, if buyers and sellers have perfect information about the quality of cars, then
 
  A) all cars will sell for the same price and there is no asymmetric information problem.
  B) all cars will sell for the same price and there is an asymmetric information problem.
  C) cars sell for their true value and there is no asymmetric information problem.
  D) all cars will sell for the same price and there is a moral hazard problem.

Question 2

Suppose a new cost-saving device will forever generate 1,000 net savings per year to a firm. The device costs 10,000. Using the Internal Rate of Return approach, the firm will make the investment
 
  A) definitely.
  B) definitely not.
  C) if the interest rate exceeds 10.
  D) if the interest rate is less than 10.

[peter]

Answer to Question 1

C

Answer to Question 2

D

[asmith134]

Correct answers!

[peter]

Great! Please up vote