In Which of the Following Markets Are Information Problems Likely

question 151

Multiple Choice

In which of the following markets are information problems likely to be most serious?

• A) automotive repair service
• B) magazines
• C) toothpaste
• D) pencils

---

Definitions:

Financial Obligations

Commitments to pay money owed to lenders or creditors, which can include loans, leases, contracts, and other forms of debt.

Debt Ratio

A financial metric that measures the proportion of a company’s total debt to its total assets, indicating the company's leverage level.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; it is calculated by dividing sales revenue by total assets.

Return on Assets

A financial ratio indicating how profitable a company is relative to its total assets, measuring how efficiently a company uses its assets to generate earnings.