Which of the following is an example of asymmetric information leading to a "lemons" market?
A) A marketing manager is uncertainty about the volume of sales in the next quarter.
B) An employee does not know the rate of inflation in the coming year and so cannot ascertain his real wage.
C) The seller of a used laptop knows more about its true condition than the buyer.
D) A firm's manager has motives that sometimes conflict with the interests of shareholders.
E) A trader, who has access to inside information, profits by trading on that information.
Correct Answer:
Verified
Q1: Centralized decision making is favored over decentralized
Q2: A used car salesperson offers a warranty
Q4: Which of the following is an example
Q5: Which of the following is an example
Q6: Which of the following is a method
Q7: In a "lemons" market:
A) both the buyer
Q8: Which of the following must be true
Q9: Which of the following is a method
Q10: Moral hazard occurs when:
A) the principal purposely
Q11: Some employers permit telecommuting where employees work
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