Which of the Following Is an Example of Asymmetric Information

question 436

Multiple Choice

Which of the following is an example of asymmetric information?

• A) When someone is applying for a job, the employer checks references to determine the previous work habits of the applicant.
• B) When an employee purchases group life insurance without taking a physical exam, she knows more about her health than does the insurance company.
• C) When someone is considering buying a used car from a dealership, the potential buyer requests documentation of the repair history of the car.
• D) All of the above are correct.

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Definitions:

Stave Off

To prevent or delay something undesirable, such as illness or an adverse event, from happening.

Human Need

Fundamental requirements that are essential for an individual's physical, psychological, and social well-being and survival.

Predicted

Foretold or forecasted, implying that an event or outcome has been stated to occur in the future based on certain evidences or calculations.

Attractive

Attractiveness refers to the qualities or features of a person, object, or idea that evoke interest, desire, or pleasure in others.