Why does the presence of imperfect information lead to inefficiency?
What will be an ideal response?
Without perfect information, consumers and producers cannot effectively judge the potential benefits or costs of a good or service. The absence of full information can thus lead to transactions that are inefficient.
You might also like to view...
The demand for a luxury good whose purchase would exhaust a big portion of one's income is
A. relatively elastic. B. relatively inelastic. C. perfectly elastic. D. unit-elastic.
_________________ —a term describing a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls.
a. Complement good b. Inferior good c. Normal good d. Superior good
Foreign ownership of debt has decreased the burden of the debt on future generations of Americans absolutely and relatively
Indicate whether the statement is true or false
If the aggregate supply curve shifts outward, then unemployment
A. and inflation will both decrease. B. and inflation will both increase. C. will increase and inflation will decrease. D. will decrease and inflation will increase.