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:

Legal Objective

A principle that requires contracts to have a purpose that is lawful and not against public policy in order to be enforceable.

Breach

The violation or breaking of a law, duty, or contractual obligation either by commission or omission.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to an increased interconnectedness of the world's economies, cultures, and populations.

UCC

The Uniform Commercial Code represents a detailed collection of regulations that manage every commercial transaction across the United States, aiming to standardize the legislation related to sales and various commercial activities.