Ratings and Reviews of Mechanics on the Internet

question 143

Multiple Choice

Ratings and reviews of mechanics on the Internet:

• A) make it easier to avoid shady mechanics, thus reducing moral hazard.
• B) raise the cost to mechanics of exploiting their adverse selection advantage.
• C) make it easier for mechanics to take advantage of their information advantage.
• D) completely prevent all forms of information asymmetries.

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Definitions:

Price

The sum of money anticipated, needed, or provided as compensation for something.

Price of Rice

The cost at which rice is sold, influenced by factors such as supply, demand, quality, and market conditions.

Demand Shift

A change in consumer desire that moves the demand curve to the right (increase) or left (decrease) in a market.

Negative Profits

A financial condition also known as losses, occurring when a company's expenses exceed its revenues.