Reading a Consumer Reports Review of a Vacuum Cleaner Before

question 70

Multiple Choice

Reading a Consumer Reports review of a vacuum cleaner before buying is the same way of dealing with information asymmetry as:

• A)a certification of a used car from a brand dealership.
• B)an employer requiring a drug test.
• C)an insurance company offering different deductible-level plans.
• D)a college charging a high tuition relative to other schools.

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Definitions:

Solvent

The state of being able to meet all financial obligations, possessing assets that exceed liabilities.

Improperly Made

Refers to items or products that have been constructed or produced in a manner that fails to meet the required or expected standards.

Breach of Contract

The failure to perform as stated in a contract without a legitimate legal excuse.

Negligence

An unintentional, careless act or omission that causes injury to another person or his property.