Which of these is explained by the lemons problem and other asymmetric information problems? a....
Question:
Which of these is explained by the lemons problem and other asymmetric information problems?
a. The fact that securities markets are only accessible by large established firms
b. The reason most financial transactions involve financial intermediaries
c. The existence of firms such as credit rating agencies
d. All of these
Market of Lemons
Market of lemons refers to a market where the issue of asymmetric information is faced by the buyers and sellers of the commodities. It refers to a market where the seller might charge a higher price or sell low-quality products because the customers are uniformed and do not have as much knowledge about the product as the seller have.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerd is correct answer.
Lemon problem and asymmetric information problems are faced by security markets. This is the reason that only large institutions...
See full answer below.
Learn more about this topic:
Get access to this video and our entire Q&A library
Types of Problems & Problem Solving Strategies
from
Chapter 2 / Lesson 11Learn the definition of problem-solving, different types of problems, and problem-solving strategies. See examples of well-defined and ill-defined problems.
Related to this Question
A triangle is measured and two adjacent sides...
Two machines fill cereal boxes at the same...
After nearly 30 years of growth, sales at Ida's...
A clerk was asked to change a $10 bill. she...
During a promotional weekend, a state fair...
I am trying to calculate my homework grade for...
If it takes 6 printing presses 4 hours to print...
A fluid has the density 4 \ \mathrm{kg/m^3} and...
Hockey team receive 2 points when they win and...
The number of rooms on the ground floor of a...
1. The table shows values of a force function...
Is time the fourth dimension?
The Electrical Stimulation Method: Theorists, Research & Applications
Electrical stimulation uses electrical impulses to treat brain and muscle problems. Learn more by exploring the theorists, research, contributions, and applications of the electrical stimulation method. Review mapping the brain, and understand how the method can be used in treatments.
Decision Making: Process & Models
When making decisions with a group, it is often difficult for everyone to agree. Explore the rational model for decision making, review an in-depth list of the decision-making process steps, and learn how to assess possible strengths and weaknesses of the group.
Problem Solving | Method, Techniques & Examples
Learn the definition of a problem solving method and see problem solving techniques. Study the problem solving process, or model, and see how it works.
Attribution Theory: Causes of Behavior & Errors
People often tend to explain the events around them as a product of internal factors or external events. In this lesson, explore attribution theory and how people assign internal or external causes of behavior, Weiner's ideas on stable and unstable causes of behavior, and the errors people make when assigning causes.
Algorithm Psychology vs. Heuristic Psychology Overview & Examples | What is an Algorithm in Psychology?
Learn about algorithms in psychology. Understand what an algorithm in psychology is, read examples of algorithms, and see a comparison of algorithms vs. heuristics.
Feature Analysis & Template Theory Model & Examples | What is Recognition by Components Theory?
Discover the recognition by components theory. Differentiate from the feature analysis theory and the template matching theory and view models of each.
Types of Problem Solving Methods in Management and Supervision
A big part of management and supervision is using the proper methods to solve problems in the workplace. Learn about a few problem-solving techniques to solve typical problems facing managers and supervisors, including the divide and conquer method, the 5-step model, and the Demin cycle techniques.
Using the Problem-Solving Cycle to Implement School Change
In this lesson, you will learn about the problem-solving cycle and how it can be used to make changes in schools. You will also learn how you can apply the steps in the cycle to engage in thoughtful, data-driven problem solving.
Elements of Thought | What is Thinking?
Understand the concept of thinking. Learn the basic elements of thinking, read about thinking in words and images, and explore Richard Paul’s elements of thought.
Emotions in Psychology: Definition, Biological Components & Survival
Emotions are part of human affection and are controlled and regulated by specific areas of the brain. Learn the definition of emotions in psychology, study the biological components, and discover the role of emotions in survival and non-verbal communication.
Frequency Distributions in Marketing Research
A frequency distribution is a visual representation that shows how often the values in a data sample occur. Learn the use of frequency distributions in marketing research, and understand how these visual representations help in interpreting data.
Amnestic Disorder Types & Treatment | What Is Amnestic Disorder?
Discover amnestic disorders, also called amnesia. Learn the definition of amnestic and view the different types of amnesia, such as organic amnestic syndrome.
Verbal Learning: Methods, Types & Processes
Verbal learning is a way to memorize new material using pictures, associations, and other activities. Discover how serial learning, paired-associate learning, and organizational processes can help with memorization.
Working Backwards to Solve Word Problems
A helpful tactic to solve word problems is to work backwards by starting with the final step and working backwards to learn where to start. Identify how to use this through provided examples.
How BAT & Miller-Orr Models Influence Target Cash Balance
Cash balance is the process companies use to determine whether to hold cash or invest it in different ways. Learn about two different strategies used to determine an ideal, or target cash balance: the Baumol-Allais-Tobin (BAT) model and the Miller-Orr model.
Harry Helson: Gestalt Psychology & Adaptation-Level Theory
Gestalt psychology is a theory that considers behavior and the mind as one unit. Learn about the contributions of psychologist Harry Helson to Gestalt psychology, including his adaptation-level theory, which asserts that individuals react to stimuli based on past experiences.
Psychophysics Overview & Examples | What is Psychophysics?
Explore psychophysics definition and learn the method of limits, the method of adjustment, and the method of stimuli. Also, see psychophysics examples.
What is Root Cause Analysis? - Definition & Examples
Root cause analysis is a technique used to identify and understand the underlying causes of a problem. Learn about the definition and examples of root cause analysis, and explore its process of data collection, asking whys, and identifying solutions.
Functional Fixedness Psychology | What is Functional Fixedness?
Learn about functional fixedness. Read about cognitive bias, see some mental set examples, and learn some strategies for overcoming functional fixedness.
The History of Counseling: Before 1900
Explore the history of counseling and follow the transition in cultural perception of mental illness. Discover how the practice of counseling can be traced back to historical figures who went against cultural norms and took a scientific approach in dealing with mental illness.
Explore our homework questions and answers library
Browse
by subject