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Komok [63]
3 years ago
11

A problem that arises in markets where one party knows more about attributes of the good being sold than the other. Sellers of u

sed goods, for example, know about their goods' defects, while buyers do not.eg. Tim would like to buy a used plasma television, but he is not an electronics expert and, thus, cannot assess the quality of a TV directly before owning it. Tim believes that owners of the worst TVs are more willing to sell their TVs than owners of the best TVs. Because of this, Tim believes that used TVs for sale are probably of low quality.Adverse SelectionDiverse SelectionNone of above
Business
2 answers:
vodomira [7]3 years ago
8 0

Answer: Adverse Selection.

Explanation:

The above situation described Adverse Selection because Adverse Selection refers to a situation where there is information asymmetry between buyers and sellers of a good or service. This means that a party involved has more information about the transaction than the other and this can lead to the person who has more information engaging in a transaction that is sure to benefit them at the expense of the person they are transacting with. A serious example is one of life insurance. Perhaps if a person knows that they will be dying soon but it won't show up on all medical scans and tests, they will get the life insurance and claim on it when they die. They had more information than the seller.

In the above scenario, Tim can make all the assumptions he wants to make but the fact is he simply will.not know what defects the television has because he is not the seller.

It is applaudible that he is approaching with caution though. He at least has a higher chance of success.

kicyunya [14]3 years ago
7 0

Answer:

Adverse selection

Explanation:

Adverse selection is a situation where buyers and sellers have access to different information, so they make decisions to buy and sell in transactions that benefits them the most. Other participants suffer as a result.

Tim has less information than the seller of second hand televisions, therefore he may not be able to make an informed decision that will benefit him.

The seller on the other hand knows all the defects on his second hand televisions. So he can sell at a price that will benefit him.

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stiks02 [169]

Here we have not been given the answer choices. However, we can see that these choices are: 2/10 net 30, 2/5 net 30, 2/5 net 20, 1/10 net 45, 1/5 net 15

Here we are to select the best one if you want to forgo the discount. Since you want the discount to be forgone, we will select the plans that offer the least discount which are options 4 and 5 1/10 net 45 and 1/5 net 15.

Net out of these two, the 1/10 net 45 gives you discount of 1% for 10 days with total payable in 45 days and the other one gives you a 1% discount in 5 days. So we would like to select the one with most number of days without discount and this would be 1/10 net 45 and would give you a total of 45 days to pay the credit as against only 15 days in other option.

Hence the option which best suites is 1/10 net 45.


6 0
4 years ago
Suppose that Cheryl's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance. Her only liabili
melamori03 [73]

Answer:

Cheryl's net worth is;

c). $5,000

Explanation:

The net worth is the value of an individual taking into account all the individual's assets and liabilities. It is a holistic view on the value of an individual. It is also used to estimate the value of a company, corporation and even countries. It is one of the standard measures used to gauge an entity's wealth. The net worth can be calculated by taking the difference between assets and liabilities. An asset is anything of economic value that is owned by an entity while a liability is anything of economic value that is owed.

The following formula can be used to estimate Cheryl's net worth;

N=A-L

where;

N=net worth

A=assets

L=liabilities

In our case;

N=unknown to be determine

A=Automobile+checking account

Automobile=$10,000 and checking account=$5,000

A=10,000+5,000=$15,000

L=student loan+car loan

student loan=$2,000

car loan=$8,000

L=2,000+8,000=$10,000

replacing;

N=15,000-10,000=$5,000

Cheryl's net worth=$5,000

4 0
3 years ago
Terry harrison is single and works as an animal control agent. he claims no allowances, and his employer computes federal tax us
julsineya [31]
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7 0
4 years ago
Eric and Ginny Gaffney live in Swarthmore, PA. Ginny's father, Kenji, lives in Sweden. For each of the following transactions th
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3 years ago
As mentioned in the video, the US produces an annual "List of Goods Produced by Child Labor or Forced Labor." How effective do y
lina2011 [118]

Answer and Explanation:

By publishing the "List of Goods Produced by Child Labor or Forced Labor" the American government is able to raise awareness among the population that, although child labor is something inconceivable in American society, it still happens with great intensity in various places around the world. This allows the population to become aware of this situation and to stop buying products produced by companies that finance and allow child labor to happen. When they stop using these products, companies suffer a decrease in demand, which can cause significant changes in the production and in the lives of children who need to work.

While consumer pressure at companies that allow child labor is effective, pressure from political and commercial authorities is more effective in bringing about change and ensuring the protection of children, as these authorities can promote severe punishments for those who allow this to happen.

7 0
3 years ago
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