Which of the Following Is an Example of Asymmetric Information

question 436

Multiple Choice

Which of the following is an example of asymmetric information?

• A) When someone is applying for a job, the employer checks references to determine the previous work habits of the applicant.
• B) When an employee purchases group life insurance without taking a physical exam, she knows more about her health than does the insurance company.
• C) When someone is considering buying a used car from a dealership, the potential buyer requests documentation of the repair history of the car.
• D) All of the above are correct.

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Definitions:

Chronic Diseases

Chronic diseases are long-lasting conditions that usually can be controlled but not cured, often affecting an individual’s quality of life.

Simple Linear Regression

A statistical method that models the relationship between a dependent variable and one independent variable using a linear equation.

Obesity

A medical condition characterized by excessive body fat accumulation, which poses a risk to health.

Diabetes

A chronic medical condition characterized by elevated levels of blood glucose due to the body's inability to produce or properly use insulin.