This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: In the market for used motorcycles there are high-quality motorcycles and low-quality motorcycles. ... (Read 191 times)

futuristic

  • Hero Member
  • *****
  • Posts: 638
on: Apr 19, 2019

Question 1

If a buyer or seller enters into an exchange with another party who has more information, there is


◦ symmetric information and moral hazard.
◦ asymmetric information and adverse selection.
◦ a negative externality imposed.
◦ a free-rider problem.

Question 2

In the market for used motorcycles there are high-quality motorcycles and low-quality motorcycles. Potential buyers cannot determine prior to purchase whether the motorcycle is high quality or low quality. Which of the following statements best describes what is likely to happen in this market?


◦ The price of a used motorcycle will be very close to the value of a high-quality motorcycle, which will encourage people to sell high-quality motorcycles.
◦ The price of a used motorcycle will be between the value of a high-quality and low-quality motorcycle. This will encourage people to withdraw high-quality motorcycles from the market.
◦ This is an example of adverse selection, as the buyer will have more information about the quality of the used motorcycle than the seller will.
◦ Over time the price of a used motorcycle will increase in this market, as there is more of an incentive for owners of high-quality motorcycles to sell than owners of low-quality motorcycles.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by futuristic on Apr 19, 2019

zacnyjessica

  • Sr. Member
  • ****
  • Posts: 345
Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 56% of students answer this correctly


futuristic

  • Hero Member
  • *****
  • Posts: 638
Reply #2 on: Apr 19, 2019
Thank you!


zacnyjessica

  • Sr. Member
  • ****
  • Posts: 345
Reply #3 on: Apr 19, 2019
Always glad to help...


Sydney Wheeler

  • Newbie
  • *
  • Posts: 4
Reply #4 on: Nov 13, 2022
thank you


« previous next »
 

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
A very high-resolution texture of the planet Mars A very high-resolution texture of the planet Mars
A very high-resolution texture of the Moon, including a normal map A very high-resolution texture of the Moon, including a normal map
Spectrum of a High-Redshift Quasar Spectrum of a High-Redshift Quasar
Overview of a computer-controlled high-pressure common rail V-8 diesel engine. Overview of a computer-controlled high-pressure common rail V-8 diesel engine.
Ten Leading Causes of Death in High-Income Countries, 2008 Ten Leading Causes of Death in High-Income Countries, 2008
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ... Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Video: Facilitated Diffusion - Glucose transport

For a complete list of videos, visit our video library