________ Is Best Described as a Situation in Which One

question 97

Multiple Choice

________ is best described as a situation in which one party is more informed than another, because of the possession of private information.

• A) Information governance
• B) Information asymmetry
• C) Information deregulation
• D) Information piracy

---

Definitions:

Negative Externality

A cost experienced by a third party not involved in the economic transaction, such as pollution affecting residents near a factory.

Spillover Cost

A cost incurred by someone who did not choose to incur that cost.

Allocative Efficiency

A state of the market where resources are allocated in a way that maximizes the net benefit to society.

Productive Efficiency

Productive efficiency occurs when an economy is operating at its maximum capacity, producing goods and services at the lowest possible cost per unit.