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.

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Definitions:

Willing and Able

Refers to a consumer's readiness and capacity to purchase goods or services at a given price level.

Market System

An economic system in which economic decisions and the pricing of goods and services are guided by the interactions of citizens and businesses.

Goods and Services

The output produced by an economy, including tangible products (goods) and intangible activities (services) that fulfill the needs or wants of consumers.

Profitable

A financial status where the income earned is greater than the expenses incurred, leading to a positive net income.