In Statesboro, GA, in the 1990’s home builders were using a faulty brand of windows when...

In Statesboro, GA, in the 1990’s home builders were using a faulty brand of windows when constructing houses. The windows would leak causing damage to the walls of the house. Buyers were aware that the faulty windows were being used in the houses, but they were unsure which houses had them and which brand of windows were faulty. This caused some potential home buyers to put off buying a home. The problem in Statesboro, GA is called…

a) a moral hazard

b) a lemons problem

c) the principal agent problem

d) a regulation problem

Expert Solution

The problem discussed above is lemons problem where they are unable to distinguish between the good and the bad windows.

Hence the correct option is

A lemons problem.

Rahul Sunny answered 2 years ago

Builders need to predict the final selling price of a home. For one model using size...

Builders need to predict the final selling price of a home. For one model using size (x), in square feet, to predict price (y), in U.S. dollars, a slope of 77 was found. Interpret this slope in context. a. If a house costs one more dollar, it is predicted to increase in size by 77 square feet, on average. b. If a house increases in size by one square foot, it is predicted to cost $77 more, on average. c....

a. Describe the health care environment in Massachusetts in the 1990's. What were the driving forces...

a. Describe the health care environment in Massachusetts in the 1990's. What were the driving forces for change that were pushing the industry? What impact did these forces have on Tufts/New England Medical Center? b. What happens within Tufts/NEMC as the external environment gyrates with change? What data in the case supports your claim? c. How did Zane gain skills as a leader of change? d. What type of change would you prefer to lead and why?

When East Germany and West Germany were reunited in 1990, the West German government accepted the...

When East Germany and West Germany were reunited in 1990, the West German government accepted the obligation to attempt to raise living standards in the eastern part of Germany rapidly. This required an immediate increase in government purchases to assist with East German infrastructure and transfer payments to the residents of the former East Germany. For political reasons, the German government did not want to raise taxes much. In effect, the government ran an expansionary fiscal policy. The German central...

When German unification occurred in 1990, the West German laws and monetary system were imposed on...

When German unification occurred in 1990, the West German laws and monetary system were imposed on the east by treaty. The Truehandstalt (Federal Privatizing Trust) was created as a trust to hold all the shares of East German enterprises and became the major mechanism through which privatization was undertaken. (i) Carefully explain the advantage that East Germany gained over other Eastern European socialist economies in developing democratic-capitalistic institutions. (ii) The Truehand is also overseeing a fundamental change of the industrial...

Exercise 5-22 CVP analysis using composite units LO P4 Handy Home sells windows and doors in...

Exercise 5-22 CVP analysis using composite units LO P4 Handy Home sells windows and doors in the ratio of 8:2 (windows:doors). The selling price of each window is $106 and of each door is $256. The variable cost of a window is $65.50 and of a door is $178.00. Fixed costs are $624,000. (Enter your "per unit" values in two decimal places.) (1) Determine the selling price per composite unit. Quantity Selling Price per unit Total per composite unit Windows...

When the Raptors were in the playoffs the demand for tickets to their home games exceeded...

When the Raptors were in the playoffs the demand for tickets to their home games exceeded the number of available seats. Draw the diagram and explain what is likely to happen

When you made an offer on a home you were buying, you thought you were getting...

When you made an offer on a home you were buying, you thought you were getting a General Warranty deed. It turns out that the owner can only give you a Quitclaim deed. How might this impact the market value of the property and your ability to get mortgage financing?

When games were randomly sampled throughout the season, it wasfound that the home team won...

When games were randomly sampled throughout the season, it was found that the home team won 127 of 198 professional basketball games, and the home team won 57 of 99 professional football games. a) Find a 95% confidence interval for the difference in the population proportions of home wins. Include the sample proportions, z α 2and standard error.b) Based on your results in part a) do you think there is a significant difference? Justify your answer; explain.

Nancy converted her personal home to a rental in 2019 when the building improvements were valued...

Nancy converted her personal home to a rental in 2019 when the building improvements were valued at $233,000. She originally purchased the home and land for $300,000. When purchased, 25% percent of the value was allocated to the land on the county property tax assessment. There have been no improvements or other adjustments to basis since 2019. What is Nancy's basis for depreciation when converted in 2019? $174,750 $225,000 $300,000

Rhonda rented her vacation home for 30 days when the Winter Olympics were held in the...

Rhonda rented her vacation home for 30 days when the Winter Olympics were held in the city. She received rent revenue was $6,000 which was a fair rental rate during this tourist season. She lived in the home 30 days. She paid a total of $7,300 for taxes and mortgage interest on the home. She paid utility expense and repair expense totaling $4,000. Total depreciation on the home is $8,000 per year. How much depreciation expense will she report on...

Question