Markets are more efficient when information is perfect

Reference no: EM13698200

1) Which of the following is an example of a change in the quantity demanded? (Hint. For which items is there a direct change in price that leads to a change in quantity demanded)

An increase in salary leads to increased spending on clothing.

A sale on shoes leads to higher purchases of shoes.

A rise in the price of peanut butter leads to higher demand for cheese sandwiches

An outbreak of e-coli in chicken leads to higher demand for beef.

2) Markets are more efficient when information is perfect; an example is:

Insider information on the release of a new block-buster drug

CARFAX reports that reveal the accident and repair history of a used car.

A fortune-tellers prediction of future interest rate movements

A readily available archive of historical weather reports

Reference no: EM13698200

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