--%>

Adverse Selection problem

I have a problem in economics on Adverse Selection problem. Please help me in the following question. When Sally Sleaze sells Terry Tonedeaf a low quality boom-box by advertising it as ‘top of the line’, there is a trouble of: (i) Irrational ignorance. (ii) Moral hazard. (iii) Adverse selection. (iv) Paradoxical value.

Select the rightmost option from the above.

   Related Questions in Microeconomics

  • Q : Price fluctuations to go bankrupt in

    Speculators are most probable to go bankrupt when their activities: (w) increase price fluctuations. (x) decrease transaction costs to other buyers or sellers. (y) dampen the volatility of prices. (z) improve economic efficiency.

    Q : Price and output combination by demand

    Not like a purely competitive firm, here a profit-maximizing monopolist can: (w) charge any price it finds advantageous and be assured of selling all this produces. (x) select a price and output combination by a downward-sloping demand curve. (y) spen

  • Q : Elasticity and profit maximization A

    A nondiscriminating monopolist cannot maximize profits through producing where demand: (w) price elastic. (x) price inelastic. (y) above marginal cost. (z) above marginal revenue. Can someone explain/help me with b

  • Q : Present value of asset by financial

    When the interest rate is 5% and a financial investment produces annual payments of price $50,000, in that case the present value of this asset is: (w) $1,000,000. (x) $5,000,000. (y) $500,000. (z) $10,000,000.

    Q : What are the Components of capital

    Components of capital account: (i) Foreign investment (ii) Foreign loans (iii) Banking capital and other capital (iv) Monetary movements.

  • Q : Break even income by marginal tax rate

    A marginal tax rate of 30 percent and income floor of $6,000 yields a break even income of: (w) $20,000 (x) $1,800 (y) $4,200 (z) $7,800 Hey friends please give your opinion for the problem of

  • Q : Demanding more labor in competitive fim

    A competitive firm will demand more labor when: (1) technological advances favor automation. (2) the price of the firm's output rises. (3) more firms enter the industry. (4) the value of the marginal product is below the wage rate. (5) workers utilize

  • Q : Main deficiencies of current welfare

    Not among main deficiencies of the current welfare system is which it sometimes: (w) gives low benefits to the poor relative to total budgetary outlays. (x) collects taxes from the poor to provide benefits to the rich. (y) yields effective marginal ta

  • Q : Charging price of profit-maximizing

    Hybrid Roses is the merely florist in 60 miles of Presidio, Texas. When total fixed costs (for example, rent and utilities) are $9 per hour, that profit-maximizing monopolist will charge a price of: (1) $10 per dozen roses. (2) $12 pe

  • Q : Ratio of percentage changes in quantity

    The ratio of the percentage change within the quantity of beef sold over the percentage change within the price of pork is: (1) price elasticity of demand for beef. (2) price elasticity of demand for pork. (3) income elasticity of dem