You Went to a Craft Show and Paid an Exorbitant

question 73

Multiple Choice

You went to a craft show and paid an exorbitant price for an embroidered shawl that the seller said was hand embroidered and had been imported from India.Several months later,you found a similar shawl in another showroom at a much lower price and realized that the one you bought was not imported.This is an example of a market with ________.

• A) asymmetric information
• B) a positive externality
• C) a negative externality
• D) the free-rider problem

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Definitions:

Incentive

A factor, often a reward or penalty, that motivates an individual or entity to act in a certain way.

Supply Curve

A visual diagram that illustrates how the price of a product correlates with the amount of the product that sellers are prepared to sell at various price levels.

Human Resource

A department within organizations focused on employee recruitment, management, and providing direction for the people who work in the institution.

Physical Resources

Physical resources refer to tangible assets and materials used in the production of goods and services, such as machinery, buildings, and raw materials.