4. Explain how information problems concerning the quality of consumer goods can lead to bad market outturns. Explain possible policies that the government could introduce to improve the situation.
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- Answer the following: 3. What is meant by the term “other customers” and why is their influence so much greater for services compared to goods? 4. Why do consumers of service perceive higher levels of risk associated with their purchase compared to goods purchase. 5. What are the marketing challenges that arose as a result of the intangibility of services? Discuss in detail.11) Consider a market for used cars. Suppose there are only two kind of cars: lemons and good cars. A lemon is worth $1,500 both to its current owner and to anyone who buys it. A good car is worth $6,000 to its current and potential owners. Buyers can't tell whether a car is a lemon untilafter they have bought the car. What do economists call the problem that buyers of used cars face? What is the price of a used car? Explain and substantiate your answer. 12) How can a warranty at the seller's expense signal that a product is high quality?53. The Indiana University basketball team trails by twopoints with eight seconds to go and has the ball. Shouldit attempt a two-point shot or a three-point shot?Assume that the Indiana shot will end the game and thatno foul will occur on the shot. Assume that a three-pointshot has a 30% chance of success, and atwo-point shot has a 55% chance of success. Finally,assume that Indiana has a 55% chance of winning inovertime.
- 4 The service quality-related e-demand factors show a weak connection with the provision of e-government information or services. Select one: a. True b. False2 Explain why a market economy may or may not be an ideal solution for a healthcare system? How does the market for insurance and insurance copays affect the healthcare market? Patents for pharmaceutical products and other medical technology make healthcare more costly. Why do we have patents? Can you think of anything that could be done to remedy this situation? What may be some moral issues with the allocation of healthcare?. Each answer should consist of one paragraph that contain analysis (not opinion). 1 Consider a highway with a hot lane and a lane that has no toll. Assuming that the toll must be paid by all cars that use the hot lane, no matter how many people are riding in them. What can you predict about the average occupancy of vehicles in the hot lane compared to vehicles in the other lane during rush hour? 2. Explain how making something illegal (like sex, booze or drugs) impacts the quality, quantity and price of the illegal substance. In addition, are there any unintended consequences of making drugs illegal that can cause harm to people? 3 Anti-fracking “Baptists” include those concerned with any further environmental degradation from extracting non-renewable resources from the earth. Identify the “bootleggers” who would support the Baptists, albeit not so publicly, but still forcefully. Why would these…
- 4. Which one of the following statements on the causes of the energy efficiency gap is correct? a. The likelihood of buying an energy-efficient refrigerator is higher if a consumer perceives a discount rate that is much higher than the market discount rate. b. Bounded rationality implies that consumers make decisions by comparing benefits and costs. c. The principal/agent issue points out the possibility that a tenant is likely to use more energy if the utilities are covered in the rent. d. If energy markets are not competitive there will be an energy efficient gap.1. a) Explain what the blue band in Figure 6-6 represents. Why is it important? b) For each category of use, give a specific example (not any of the examples given in the text) of how water might be extracted and used, but not consumed. c) For which category of use is in the blue band growing wider fastest? What does this mean? Why is this important?16. Consider a market in which high-quality and low-quality television sets are sold. Before consumers make a purchase, they do not know the quality of the sets , but the sellers do know . As compared to a situation where both consumers and sellers know the quality of the sets, this situation would ) A)cause no change in the ratio of low to high-quality sets sold B)increase the fraction of high-quality sets sold (C) increase the fraction of low-quality sets sold (D) cause the average price of goods sold to rise.
- 2. Suppose that emissions of sulfur dioxide are managed via a Cap-and-Trade policy. In this circumstance, how can an environmental group, such as Greenpeace, reduce emissions of this pollutant? Explain your answer. How would it effectively result in a reduction in emissions? What is the main obstacle for Greenpeace to achieve this? 3. Explain why a Cap-and-Trade program is more likely to be efficient than a standard. Be specific. 4. Explain why the firm’s MAC-curve is its demand curve for pollution permits.1. Give an example of good or commodity that is intagible and explain why it is so? 2. Why does the government borrow money when it still has enough on hand?5. Can the supply chain handle the necessary changes? Before an organization commits toramping up its input, it is essential to confirm that its supply chain will be able to handlerelated requirements.
