Which of the Following Relationships Involves Asymmetric Information

question 25

Multiple Choice

Which of the following relationships involves asymmetric information?

• A)A potential employee knows more about his skills and motivations than potential employers.
• B)The seller of a used car knows of mechanical problems that aren't easy for the average buyer to observe.
• C)A real estate agent knows the lowest price a seller is willing to sell her house for, but does not reveal it to people he shows the house.
• D)All of the above are correct.

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Definitions:

Endocrine Gland

A gland that secretes hormones directly into the bloodstream to regulate various body functions.

Benign Tumors

Noncancerous growths in the body that are generally not life-threatening and do not spread to other parts.

Muscle Cells

Specialized cells that make up muscle tissue, capable of contracting and relaxing to produce movement.

Uterus

A hollow, pear-shaped organ in a female's lower abdomen where offspring are conceived and in which they gestate before birth; the womb.