One consequence of the asymmetric-information problem in the used car market, if left unresolved, is the higher probability of:
A. New cars being better than used-cars in quality
B. A declining quality of used cars in the market
C. A rising quality of used cars in the market
D. Used-car buyers willing to pay higher prices
B. A declining quality of used cars in the market
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Without any change in the demand for labor, how are the following events likely to change the equilibrium wage and employment level in a dairy farm?
a) An increase in the population of the region where the dairy farm is located b) The establishment of a cotton mill that pays higher hourly wages, near the dairy farm c) The shutdown of a rice farm located near the dairy farm
What is the difference between labor's marginal product and marginal revenue product?
A) The marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firm's total sales revenue. B) Labor's marginal product is a measure of labor's productivity while labor's marginal revenue product is a measure of labor's ability to sell the firm's products. C) The marginal revenue product of labor is the dollar value of hiring an additional worker while the marginal product of labor is the increase in the firm's physical output as a result of hiring an additional worker. D) The marginal product of labor is the increase in output as a result of hiring an additional worker while the marginal revenue product of labor is the increase in profit as a result of hiring an additional worker.