Which of the following is most likely to be characterized by substantial asymmetric information?
a. a soft drink purchased in a vending machine
b. a car wash to benefit the local high school band
c. a collectible baseball card purchased on eBay
d. wireless service that includes unlimited minutes and texting
c
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What is a price ceiling?
What will be an ideal response?
"Because Coke and Pepsi are substitutes, a decrease in the price of Pepsi will cause the demand for Coke to decrease
This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left." Which of the following correctly comments on this statement? A) The statement will be true if consumer tastes for Coke and Pepsi do not change. B) The statement is false because Pepsi is an inferior good; Coke is a normal good. C) The statement is false because one cannot assume that Coke and Pepsi are substitutes for all consumers. D) The statement is false because a change in the price of Coke would not change the demand for Coke.