Because of asymmetric information, most used cars that are offered for sale will be sold for prices that are greater than their true value. Because of this fact, the used car market falls victim to
A) the free-rider problem. B) adverse selection.
C) deadweight loss and economic inefficiency. D) a surplus of used cars.
B
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Why is it important to consider the personal income tax when evaluating the corporate income tax? Give an example of how differential rates between the corporate and personal income tax rates can change taxpayer behavior
What will be an ideal response?
A person has a comparative advantage in producing a good if:
a. that person can produce the good at a lower absolute cost than anyone else. b. that person can produce the good at a lower opportunity cost than anyone else. c. that person has a perfectly elastic demand curve for her good. d. that person spends less on advertizements. e. that person can produce the good at a higher opportunity cost than anyone else.