When two parties are involved in an economic transaction and one party has more information and knows much more than the other party this is considered: Group of answer choices inequalities of exchange asymmetric information imperfect information un-balanaced information

When two parties are involved in an economic transaction and one party has more information and knows much more than the other party this is considered: Group of answer choices inequalities of exchange asymmetric information imperfect information un-balanaced information

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter19: The Problem Of Adverse Selection

Section: Chapter Questions

Problem 1MC

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When two parties are involved in an economic transaction and one party has more information and knows much more than the other party this is considered:

Group of answer choices

inequalities of exchange

asymmetric information

imperfect information

un-balanaced information

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information refers to a market where one side (either the buyer or theseller, but usually the buyer) has less information than the other side of themarket. When there is asymmetric information in a market, markets are inefficientbecause the side with less information doesn't want to take the risk involved inbuying (or selling) the good or service.One method of solving this problem is through screening. Screening is a strategyone uses when they don't have information. A screen can be any indicator thatlets the screener know if the good or service is reliable and will meet thescreener's wants.Offer an example of when you used screening to solve a lack ofinformation. What kind of screen did you use?• Was the screen effective? Were you happy with the result?
Imagine that you own your business. It does not need to be the same as in other questions, youare allowed to pick a different firm or product. Imagine further that you or your consumers facean asymmetric information problem. a.Please explain in detail what this asymmetric information problem, and who isfacing it (your firm or your consumers).b. Please explain how you solved this problem.
Before selling anyone a health insurance policy, theKramer Insurance Company requires that applicantsundergo a medical examination. Those withsignificant preexisting medical problems are chargedmore. This is an example ofa. moral hazard.b. adverse selection.c. signaling.d. screening.
My answer is wrong The answer：adverse selection causes an inefficiently large number of transactions to occur. is wrong！！！
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There is a chance of creating defamation by deliberately discussing false information that may harm the beliefs or opinions that are generally held about someone or some organization. O Slander O Libel O Damaging O Disruptive
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