Market Signals Are

Multiple Choice

Market signals are

A) actions taken by buyers and sellers to communicate quality in the presence of perfect information.
B) only strong if obtaining the signal is more costly for individuals with valued traits than for those with non-valued traits.
C) used to differentiate those who will drive equally carefully whether or not they have auto insurance from those who drive less carefully when they have insurance.
D) used to distinguish between high and low quality and help correct the adverse selection problem.