Question 1

Opportunism may occur when

Accepted Answer

A)  both parties have limited information. 
B)  both parties have full information. 
C)  one party has information the other does not. 
D)  All of the above. 
A)  both parties have limited information. 
B)  both parties have full information. 
C)  one party has information the other does not. 
D)  All of the above.

Question 2

The minor league system in professional baseball can be thought of as a

Accepted Answer

A)  screening tool. 
B)  signaling tool. 
C)  form of statistical discrimination. 
D)  being used for the wrong reasons. 
A)  screening tool. 
B)  signaling tool. 
C)  form of statistical discrimination. 
D)  being used for the wrong reasons.

Question 3

If all consumers are uninformed about the quality of a product

Accepted Answer

A)  firms can increase product by selling the same product under a different name at a different price. 
B)  firms will not be able to price discriminate. 
C)  firms will price discriminate. 
D)  firms will increase profits by charging different prices for the same product. 
A)  firms can increase product by selling the same product under a different name at a different price. 
B)  firms will not be able to price discriminate. 
C)  firms will price discriminate. 
D)  firms will increase profits by charging different prices for the same product.

Question 4

The XYZ Co.sells shirts.Shirts with the company label on the tag are perceived to be of higher quality than shirts with the store's label.Yet,shirts are of identical quality regardless of label.The demand for perceived high-quality shirts is ph = 50 - qh.The demand for perceived low-quality shirts is
pl = 10 + ph - ql.The firm can produce shirts at TC = qh + ql.How many shirts does the firm label as low quality and how many as high quality? What prices are charged?

Accepted Answer

The marginal cost of a shirt equals 1 re

Question 5

If sellers of good cars and sellers of lemons both offer a warranty on their cars,consumers will then be able to tell which cars are the lemons.

Accepted Answer

A) True 
 B)False

Question 6

With asymmetric information among consumers and positive search costs,a firm may

Accepted Answer

A)  raise its price above the monopoly price. 
B)  price at the monopoly level. 
C)  price at the full information competitive level. 
D)  None of the above. 
A)  raise its price above the monopoly price. 
B)  price at the monopoly level. 
C)  price at the full information competitive level. 
D)  None of the above.

Question 7

Adverse selection occurs when an agreement encourages undesirable behavior.

Accepted Answer

A) True 
 B)False

Question 8

What could be a potential explanation for a firm selling virtually identical products under different brands?

Accepted Answer

A)  Consumers are well informed about the quality of the products. 
B)  Consumers believe that the products' quality is similar and thus firms are able to price discriminate. 
C)  Consumers always favor private-label brands. 
D)  Consumers believe that the products' quality differs and thus firms are able to price discriminate. 
A)  Consumers are well informed about the quality of the products. 
B)  Consumers believe that the products' quality is similar and thus firms are able to price discriminate. 
C)  Consumers always favor private-label brands. 
D)  Consumers believe that the products' quality differs and thus firms are able to price discriminate.

Question 9

The number of brands of identical products will most likely increase as

Accepted Answer

A)  the number of informed consumers increases. 
B)  the cost of producing many brands decreases. 
C)  the number of uninformed consumers decreases. 
D)  None of the above. 
A)  the number of informed consumers increases. 
B)  the cost of producing many brands decreases. 
C)  the number of uninformed consumers decreases. 
D)  None of the above.

Opportunism may occur when

The minor league system in professional baseball can be thought of as a

If all consumers are uninformed about the quality of a product

If sellers of good cars and sellers of lemons both offer a warranty on their cars,consumers will then be able to tell which cars are the lemons.

With asymmetric information among consumers and positive search costs,a firm may

Adverse selection occurs when an agreement encourages undesirable behavior.

What could be a potential explanation for a firm selling virtually identical products under different brands?

The number of brands of identical products will most likely increase as

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Contracts and Moral Hazards

Filters

Exam 19: Asymmetric Information

Opportunism may occur when

The minor league system in professional baseball can be thought of as a

If all consumers are uninformed about the quality of a product

If sellers of good cars and sellers of lemons both offer a warranty on their cars,consumers will then be able to tell which cars are the lemons.

With asymmetric information among consumers and positive search costs,a firm may

Adverse selection occurs when an agreement encourages undesirable behavior.

What could be a potential explanation for a firm selling virtually identical products under different brands?

The number of brands of identical products will most likely increase as

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Contracts and Moral Hazards

Filters