You have seen how asymmetric information can reduce the average quality of products sold in a market, as low-quality products drive out high-quality products. For those markets in which asymmetric information is prevalent, would you agree or disagree with each of the following? Explain briefly:
a. The government should subsidize Consumer Reports.
b. The government should impose quality standards—e.g., firms should not be allowed to sell low-quality items.
c. The producer of a high-quality good will probably want to offer an extensive warranty.
d. The government should require all firms to offer extensive warranties.