When One Party to a Transaction Has More Information About

question 47

Multiple Choice

When one party to a transaction has more information about the characteristics of the good or service to be trade than does the other party,economists say that information is:

• A) uneven.
• B) asymmetric.
• C) imperfect.
• D) disequilibriated.

---

Definitions:

Labor

The human effort, both physical and mental, used in the production of goods and services.

Substitution Effect

The change in quantity demanded of a good or service as consumers switch to or from substitutes when the price changes.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Manufacturing Wages

The compensation paid to workers involved in the production and assembly processes within manufacturing industries.