The Term That Is Used to Refer to a Situation

question 85

Multiple Choice

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

• A)inefficient market hypothesis.
• B)moral hazard.
• C)information disparity.
• D)asymmetric information.

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Definitions:

Capacity to Contract

refers to the legal ability of a person to enter into a binding agreement.

Ward's Capacity

The legal competence or ability of a ward (a person under the protection of a legal guardian) to act in their own interests.

Guardian with Full Powers

An individual appointed by the court to have complete responsibility for the personal and/or financial matters of a minor or legally incapacitated person.

Voidable Policy

A contract or insurance policy that can be declared invalid by one of the participating parties due to certain conditions not being met or misrepresented.