Of the Following,the Best Example of Private Information Is When

question 56

Multiple Choice

Of the following,the best example of private information is when

• A) Michael knows the price of a gallon of milk at the minimart but Michelle doesn't know.
• B) you are selling a used car and you know your used car's defects but a potential buyer cannot find out about them until after buying.
• C) you are selling a used car and you do not know your used car's defects
• D) you don't know the quality of a used car and must hire a trained mechanic who tells you all its defects.
• E) you pay the owner of a used car a little extra and she lets you know all of the car's defects.

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Positively Sloped

A line or curve on a graph that moves upward and to the right, indicating a direct relationship between two variables.

Negatively Sloped

Describes a line on a graph that moves downward from left to right, indicating an inverse relationship between two variables.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total benefits to society from the trade of a good or service.