If a Buyer in an Economic Transaction Has More Information

question 162

Multiple Choice

If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller.This phenomenon is due to

• A)moral hazard.
• B)adverse selection.
• C)economically irrational behavior.
• D)gains from trade.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.