Mark the correct answer(s) a. Moral hazard leads market participants to take higher risks becaus they know that they will not be held responsible in cae of failure. b. Akerlof's lemon market model and the solutions show that goverment does always have to intervene to keep the market working in case of asymmetric information. c. In real world markets, both sides of the market might suffer from a lack of information.
Mark the correct answer(s)
a.
Moral hazard leads market participants to take higher risks becaus they know that they will not be held responsible in cae of failure.
b.
Akerlof's lemon market model and the solutions show that goverment does always have to intervene to keep the market working in case of asymmetric information.
c.
In real world markets, both sides of the market might suffer from a lack of information.
d.
Heterogeneity leads to more infomation that a consumer has to collect before being able to make a rational decision.
e.
If one market side has more information than the other side, economist name this situation as asymmetric information.
f.
Negative external effects lead to a higher than optimal market quantity.
g.
Competitive markets are assumed to have total transparency and information.
h.
Most markets do not produce or trade homogeneous, but heterogeneous goods.
i.
Akerlof's lemon market model and the solutions show that goverment does not always have to intervene to keep the market working in case of asymmetric information.
j.
Positive external effects do not need a corrective intervation.
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