Credence goods are particularly susceptible to the lemons problem because
A) they have qualities that are difficult for producers to fully assess.
B) they have qualities that are difficult for consumers to fully assess.
C) creative responses among producers create volatility in market supply.
D) creative responses among consumers create volatility in market demand.
Answer: B
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When the government sells something it produces,
a. revenue received must be greater than cost to justify government production b. revenue received must equal cost because government is a nonprofit organization c. the price does not always reflect the cost of producing the good d. the price charged is an accurate measure of the benefits generated e. it prices the good the same way a natural monopolist would
When people make a decision to not participate in a program unless they actively enroll for it, program participation is:
A. likely to be higher than if people were automatically enrolled and had to actively opt-out of participating. B. likely to be lower than if people were automatically enrolled and had to actively opt-out of participating. C. likely to be the same as if people were automatically enrolled and had to actively opt-out of participating. D. exclusive, which always makes it more attractive to people.