All of the Following Statements About Asymmetric Information Are True

question 59

Multiple Choice

All of the following statements about asymmetric information are true except

• A) asymmetric information occurs when one party to a transaction has relevant information to the transaction that the other party does not have.
• B) asymmetric information creates market failures because it makes it harder for individuals to engage in transactions that would take place in the presence of perfect information.
• C) asymmetric information can only be solved through government intervention.
• D) asymmetric information occurs in the market for used cars and in the insurance market.

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Definitions:

19th Century

A period from 1801 to 1900 characterized by significant social, economic, and technological changes, including the Industrial Revolution.

Capitalism

A mode of production in which owners of capital (capitalists) purchase labor power from workers at the market rate in order to produce surplus value and hence make profit. In this system, workers are expropriated; that is, because they do not own the means of production, they must sell their labor power in order to survive.

Emotional Branding

A strategy in marketing that aims to build a brand connection with consumers through the evocation of emotions by relating the brand's values and identity to personal feelings and experiences.

Volunteerism

The practice of offering one’s time and services to assist others or a cause without the expectation of monetary reward.