Chapter 16: Problem 7
What are some ways a seller of labor (that is, someone looking for a job) might reassure a possible employer who is faced with imperfect information?
Chapter 16: Problem 7
What are some ways a seller of labor (that is, someone looking for a job) might reassure a possible employer who is faced with imperfect information?
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How might adverse selection make it difficult for an insurance market to operate?
What are some ways a seller of goods might reassure a possible buyer who is faced with imperfect information?
For each of the following purchases, say whether you would expect the degree of imperfect information to be relatively high or relatively low: a. Buying apples at a roadside stand b. Buying dinner at the neighborhood restaurant around the corner c. Buying a used laptop computer at a garage sale d. Ordering flowers over the Internet for your friend in a different city
A website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent examinations of their emerald, which are available to the customer for inspection. a. How would you expect this improved information to affect demand for emeralds on this website? b. How would you expect this improved information to affect the quantity of high-quality emeralds sold on the website?
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