Which of the following involves either the buyer or the seller of a product having more information about the quality or price of the product than the other party?
a. Asymmetric information
b. Imperfect information
c. Risk assessment
d. Adverse selection
a. Asymmetric information
Asymmetric information is the condition where one party, either the buyer or the seller, has more information about the quality or price of the product than the other party.
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Ceteris paribus, bond price and bond yields are
A) inversely related. B) positively related. C) not related. D) associated but not correlated.
Why is limited liability so important when firms try to raise large amounts of financial capital? How is this advantage of a corporation tied to a disadvantage of a corporation?
What will be an ideal response?
Which of the following statements is true?
a. The doctrine of laissez-faire advocates an economic system with extensive government intervention and little individual decision-making. b. In capitalism income is distributed on the basis of need. c. Adam Smith was the father of socialism. d. Most real-world economies are mixed economic systems. e. The "invisible hand" refers to government economic control.