If a Buyer in an Economic Transaction Has More Information

question 13

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 behaviour.
• D)gains from trade.

---

Definitions:

Bodily Arousal

The physiological and psychological state of being awoken or stimulated, often associated with emotion, stress, or excitement.

Emotion

A complex psychological state involving three distinct components: a subjective experience, a physiological response, and a behavioral or expressive response.

James-Lange Theory

A theory of emotion proposing that physiological arousal precedes the experience of emotion.

Emotional Experience

The complex psychological state involving an individual's subjective feelings, physical responses, and behavioral expressions in response to stimuli.