Question

QUESTION 7 2 Peter has a really terrible toothache and decides to go and see Marge, his dentist. Marge recommends Peter has all his back teeth removed and a partial denture put in. This procedure would be very expensive and Peter is unsure what to do Which of the following statements are true Peter, as a consumer, is fully informed and therefore can weigh up the known costs and benefits and make a decision. Peter should go to every other dentist in his area to gain other opinions before he makes the decision. Peter may not be getting the optimal dental care due to Marge possessing more information than Peter This is an example of a Lemons Market as Marge is trying to pass off a lower quality product as the best one for Peter QUESTION 8 Damian is looking to purchase a second-hand guitar. There are two stores in the city which sell them but there are alsco 8 many options listed online on the site "Gumtree". In deciding hether or not he wants a particular guitar,an wishes to try it first. This means he will have to drive to a person's house and play the guitar Select the item from the list provided to make the following statements true 1. Adverse selection 2. 20% 3. Asymmetric information 4. Marginal benefit 5. Damian should search until his MC of searching equal the expected value of the If Allans Billy Hyde (a music store) is able to provide Principal-agent problem 6. a warranty. Damian is more likely to purchase a 0 Expected value 7. 8096 second-hand guitar from them. This is an example 8. Costly to fake principle Y If Damian has a job and Peter (who is also looking . Ma for a second-hand guitar) does not, ceterus paribus, 10. Moral hazard Peter will spend 11. Marginal cost 12. Less time looking

FOR QUESTION 7 I AM NOT SURE ABOUT THE SECOND OPTION OR IF THERE IS ANOTHER OPTION (IS NOT ONLY ONE ANSWER, YOU CAN CHOOSE MANY ANSWERS).

FOR QUESTION 8 I AM NOT SURE ABOUT THE SECOND STATEMENT NOT SURE IF IS MORAL HAZARD OR COSTLY TO FAKE PRINCIPLE

Answer 1