THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 127

Multiple Choice

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A manufacturer of automobiles conducted a market survey.Eighty percent of the customers want better fuel efficiency,while 55% want a vehicle navigation system and 45% percent want both features.
-The probability that a person wants better fuel efficiency and also a vehicle navigation system is:

• A)0.90
• B)0.10
• C)0.45
• D)0.35

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Definitions:

Asymmetric Information

A situation in which one party in a transaction has more or superior information compared to another, often leading to an imbalance in decision-making.

Inefficient Outcomes

Situations in which resources are not allocated optimally, leading to wasted resources or unmet potential.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, resulting in market balance.

Moral Hazard

A situation in which one party engages in risky behavior or lacks incentive to guard against risk because they are protected by an insurance or other agreement.