Which of the Following Relationships Involves Asymmetric Information

question 33

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) CarCheck allows car buyers to obtain used vehicle histories, providing them with the same information as the dealership salesperson.
• D) The goalkeeper in a soccer game must guess whether the penalty taker will shoot to the goalkeeper's right or left side.

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Definitions:

Misrepresentation

Misrepresentation involves giving incorrect information by one individual to another, persuading the latter to enter into a contract based on that faulty information, unintentionally leading to misconceptions during agreement formulation.

Insurance Policy

A contract between an insurer and a policyholder specifying the terms for the payment of claims in the event of a loss.

Contracted

Contracted generally means to have entered into a formal agreement with specific terms and conditions.

Emissions Tests

Procedures used to measure the pollutants released from vehicles or industrial sources to ensure compliance with environmental standards.