Saturday, May 28, 2011

Unit 1: Overcoming information failure: Fuel consumption labels in the USA

Thanks to tutor2u for this

Would you buy a car knowing how much more (or less) than the average car you would spend on fuel? That's what's happening in the USA

http://money.cnn.com/2011/05/25/autos/new_fuel_economy_labels/index.htm?iid=HP_River

a) What is the market failure this action is trying to reduce?
b) To what extent do you think the policy will reduce the market failure?

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