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Why might it be difficult for a buyer and seller to agree on a price when imperfect information exists?
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- Why is imperfect information a problem in market economies? Give a current example of how imperfect information causes a disruption in a market.In circumstances of imperfect information should one expect the market to be efficient? Explain briefly.What impact do asymmetric and imperfect information have on prices and quantities? Group of answer choices An unstable equilibrium. A decline in prices or quantities of products sold. One party (buyer/seller) will always be unhappy. One party will be made better off, and the other party will be made worse off.
- It is often costly to obtain the information necessary to make good decisions. Yet, your own interests can best be served by rationally weighing all options available to you. This requires informed decision making. Does this mean that making uninformed decisions is irrational? How do you determine how much information is the right amount?BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form. Form Type Mix of Forms Form Cost A 0.5 $3.00 B 0.5 $1.00 The expected cost of digitizing a form is . Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem. Suppose that after the agreement, the client sends only forms of type A. The expected digitization cost per form of the forms sent by the client is . This leads to an expected loss of per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)What are some ways a seller of goods might reassure a possible buyer who is faced with imperfect information?
- What are three economic negatives inherent in imperfect information and what would be an alternative approach rationale for each? Thanks.Pick a good and explain how asymmetric or imperfect information could impact the price and confidence of a buyer or seller.Discuss the consequences of asymmetric information for Market Equilibrium.
- What type of bias relies too heavily on one piece of information in making a final decision? A. Availability Heuristic Bias B. Bandwagon Effect C. Anchoring BiasIn the famous court case Stambovsky v. Ackley a prospective homebuyer attempts to back out of a purchase after learning that the home was widely believed to be haunted since the current owner had it included in a tour of haunted homes. Prior to the prospective buyer backing out, what imperfect information situation applied to this situation? Explain.correctly gives explanation