Which of the following is a prominent solution to adverse selection in used-car markets?
A) An imposition of a tax on the sale of each unit in the used-car market
B) The imposition of a price ceiling in the used-car market
C) The imposition of a price floor in the used-car market
D) Third-party certification of used cars
D
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Canada produces MP3 players and lumber, and the marginal costs for the two products are $200 per 1,000 board-feet of lumber and $100 per MP3 player
China also produces these goods, and the marginal costs are $300 per 1,000 board-feet of lumber and $100 per MP3 player. Which country has the comparative advantage in lumber production? A) Canada B) China C) Both countries share the comparative advantage. D) We need more information to answer this question.
Attempts to alleviate poverty have included all of the following income-maintenance programs EXCEPT
A) Social Security. B) temporary assistance to needy families. C) 401(k) plans. D) food stamps.