Which of the Following Relationships Involves Asymmetric Information

question 20

Multiple Choice

Which of the following relationships involves asymmetric information?

• A) Patients can look up information regarding certain prescription drugs giving them the same information as their doctors.
• B) Consumer Reports allows customers of DVD players to know as much about the quality of various players as the store salesperson.
• C) Car Fax allows car buyers to obtain used-vehicle histories providing them with the same information as the dealership salesperson.
• D) The goalkeeper in a football game must guess whether the penalty taker will shot to the goalkeeper's right or left side.

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Definitions:

Negative Sign

Generally represents an opposite direction of influence or a decrease in a mathematical or statistical context.

Cross-elasticity of Demand

A measure indicating how the demand for one good responds to a change in the price of another good.

Popcorn

A type of corn kernel which expands and puffs up when heated, commonly enjoyed as a snack.

Potato Chips

Thin slices of potato that are fried or baked until crispy and often flavored.