Suppose that there are two types of cars, good and bad. The qualities of cars are not observable but are known to the sellers. Risk-neutral buyers and sellers have their own valuation of these two types of cars as follows:  Types of CarsBuyer's ValuationSeller's ValuationGood (50% probability)5,0004,500Bad (50% probability)3,0002,500When a buyer does not observe the quality, what is the highest price she will offer for a used car if she ignores adverse selection?

In a country with a mixed market economy, what actions may government prevent?

a. open competition among car manufacturers b. the addition of dangerous narcotics in children's cough syrup c. a reduction in fuel prices d. the bankruptcy of a small business

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services. This would tend to increase economic efficiency by decreasing the costs of medical services

A) government-provided health care B) market-based reforms of the health care system C) socialized medicine D) the Patient Protection and Affordable Care Act (ACA)