In a free market there are virtually no restrictions, or at best few restrictions, on how a good or service can be produced or sold

In the one-period model, what do we assume about household preferences?

A) Households prefer more to less. B) Households like money. C) Households dislike taxes. D) Households care about others.

Explain the nature and consequences of asymmetric information for each of the following cases. What options are available in each instance to reduce the problem?

a. medical insurance b. issuance of credit cards c. professional athletes d. market for used appliances