Question 1

Screening and signaling in the labor market are inefficient

Accepted Answer

A)  unless college costs are relatively low. 
B)  unless they result in a better job match. 
C)  because the benefits are spread out over many firms. 
D)  because they raise the wage paid to all workers. 
A)  unless college costs are relatively low. 
B)  unless they result in a better job match. 
C)  because the benefits are spread out over many firms. 
D)  because they raise the wage paid to all workers.

Question 2

Adverse selection occurs when there is

Accepted Answer

A)  full information. 
B)  unobserved behavior. 
C)  an unobserved characteristic. 
D)  a worker who shirks because his boss does not watch him. 
A)  full information. 
B)  unobserved behavior. 
C)  an unobserved characteristic. 
D)  a worker who shirks because his boss does not watch him.

Question 3

Used car buyers will believe that a car is of good quality when the seller signals the car's high quality by offering a warranty when

Accepted Answer

A)  a warranty on a lemon is costly to the seller. 
B)  warranties are offered on all cars. 
C)  warranties are only offered on lemons. 
D)  a warranty on a good car is a false signal. 
A)  a warranty on a lemon is costly to the seller. 
B)  warranties are offered on all cars. 
C)  warranties are only offered on lemons. 
D)  a warranty on a good car is a false signal.

Question 4

-The above figure shows the payoff to two firms in an industry deciding to make an investment in worker safety.The Nash equilibrium

Accepted Answer

A)  is for just one of the firms to make the investment. 
B)  is for both firms to make the investment. 
C)  is for neither firm to make the investment. 
D)  does not exist. 
A)  is for just one of the firms to make the investment. 
B)  is for both firms to make the investment. 
C)  is for neither firm to make the investment. 
D)  does not exist.

Question 5

The requirement that all drivers must carry auto insurance reduces

Accepted Answer

A)  moral hazard. 
B)  the effectiveness of signaling. 
C)  adverse selection. 
D)  the chance of auto accidents. 
A)  moral hazard. 
B)  the effectiveness of signaling. 
C)  adverse selection. 
D)  the chance of auto accidents.

Screening and signaling in the labor market are inefficient

Adverse selection occurs when there is

Used car buyers will believe that a car is of good quality when the seller signals the car's high quality by offering a warranty when

-The above figure shows the payoff to two firms in an industry deciding to make an investment in worker safety.The Nash equilibrium

The requirement that all drivers must carry auto insurance reduces

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, externalities, rivalry, and Exclusion

Contracts and Moral Hazards

Filters

Exam 18: Asymmetric Information

Screening and signaling in the labor market are inefficient

Adverse selection occurs when there is

Used car buyers will believe that a car is of good quality when the seller signals the car's high quality by offering a warranty when

-The above figure shows the payoff to two firms in an industry deciding to make an investment in worker safety.The Nash equilibrium

The requirement that all drivers must carry auto insurance reduces

Introduction

Supply and Demand

A Consumers Constrained Choice

Demand

Consumer Welfare and Policy Analysis

Firms and Production

Costs

Competitive Firms and Markets

Properties and Applications of the Competitive Model

General Equilibrium and Economic Welfare

Monopoly and Monopsony

Pricing and Advertising

Game Theory

Oligopoly and Monopolistic Competition

Factor Markets

Uncertainty

Property Rights, externalities, rivalry, and Exclusion

Contracts and Moral Hazards

Filters