3 & 4 please There is at least one answer but there may be multiple correct answ
ID: 1130395 • Letter: 3
Question
3 & 4 please There is at least one answer but there may be multiple correct answers. Which of the following statements concerning the evidence on the effect of disclosure laws, if any, are correct? 3. ind a) Studies of the effect of mandatory disclosure laws concerning new stock issues f substantially reduced riskiness of b) A study of the Wisconsin defect disclosure law found that it significantly increased c) A study of the Wisconsin defect disclosure law found that it significantly decreased d) A study of the Wisconsin defect disclosure law found that it did not significantly that such laws significantly increased returns and new issues. the quality of used cars sold in that state compared to other states. the price of used cars sold in that state compared to other states increase the quality of used cars sold in that state compared to other states. A study of the Wisconsin defect disclosure law found that it significantly increased e) the price of used cars sold in that state compared to other states. 4. Which of the following statements concerning the lemons problem are correct? a) A market for high quality goods may not exist because informed buyers have no way b) c) d) e) to signal their valuation of goods to uninformed sellers. If sellers are better informed than buyers, only high quality goods will be traded. Product guarantees have proved to be unhelpful in alleviating the lemon's problem. Product guarantees are one way to help alleviate the lemon's problem. Price controls have proved helpful in alleviating the lemon's problem.Explanation / Answer
3. b and c are correct options.
Disclosure laws makes it mandatory for the firm's or people to disclose each and every information about the product they are selling in the market. Now in case of used car with disclosure laws sellers have to disclose everything about their product . This will reduce the price of product sold and at the same time it will improve the quality of goods sold . This is because the seller with low quality will himself move away from market.
4. c,d, are correct options
In lemon market buyers and sellers didn't have complete information . So in lemon market if we offer product qurantee then problem of lemon will be solved.
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