Exam 12: Markets With Private Information

In a pooling equilibrium, there is ________ of insurance in the market for safe drivers and there is ________ of insurance in the market for aggressive drivers.

In the used car market with no warranties, the market for lemons (poor quality used cars)is ________ and the market for good cars is ________.

Consider a market for used cars.Suppose there are only two kind of cars: lemons and good cars.A lemon is worth $1,500 both to its current owner and to anyone who buys it.A good car is worth $6,000 to its current and potential owners.Buyers can't tell whether a car is a lemon until after they have bought the car.What do economists call the problem that buyers of used cars face? What kind of cars (lemons, good cars, or both)are traded? Explain and substantiate your answer.

In the United States, of all types of insurance, people spend the most on ________ insurance.

One way of screening in the automobile insurance market is for companies to

Which of the following is not a problem in health-care markets?

Signals are believable when the cost of sending a ________ is known to be ________.

The lemons problem in the used car market is that

The tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party is known as

In the used car market with no warranties, the equilibrium is a ________ and there is ________.

What role does moral hazard play in the market for health care?

What is private information and what problems does it create?

In the used car market, adverse selection is a problem primarily when

Vaccination against infectious diseases ________ so private markets will provide ________ efficient quantity of vaccination.

Without warranties, used car buyers can assume that all used cars are "lemons" because of

What is the private information in the market for health-care insurance? What is the private information in the market for health care?

Most college professors are granted tenure after six years of employment.Tenure implies a lifetime appointment.What problem does this situation create, and how can colleges minimize the problem?

In the health insurance market, adverse selection occurs when

Insurance companies

In the used car market with warranties, the equilibrium is a ________ and the lemons problem is ________.