The adverse selection problem and the principal-agent problem are examples of

Question

Quizplus · Accepted Answer

The adverse selection problem and the principal-agent problem are both examples of asymmetric information, where one party has access to more or better information than the other party. This can lead to market failures, such as higher costs or reduced efficiency. Options A, C, and D are not correct, as they refer to different economic concepts. Option E is partly correct, as these problems can lead to market failures, but it is not the best answer as it is too broad.

The Adverse Selection Problem and the Principal-Agent Problem Are Examples