Tyler buys a futures contract from Alex that gives him the right to buy 1,000 barrels of oil at $125 per barrel in 48 months. What happens in 48 months if the actual price per barrel of oil is $100? A.) Tyler must pay Alex $25,000. B.) Tyler makes a profit of $25 per barrel, or $25,000. C.) The contract becomes void because the price turned out lower than expected. D.) Alex must give Tyler $10,000.

To what sorts of customers would an insurance company offer a policy with a high copay? What about a high premium with a lower copay?

A website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent examinations of their emerald, which are available to the customer for inspection. How would you expect this improved information to affect demand for emeralds on this website? How would you expect this improved information to affect the quantity of high-quality emeralds sold on the website?

What are some ways a seller of labor (that is, someone looking for a job) might reassure a possible employer who is faced with imperfect information?