Lenny, who has no mechanical knowledge of automobiles, takes his car to a mechanic because of a pinging noise in the engine. The transaction between Lenny and the mechanic is characterized by:
A) symmetric information with complete ignorance.
B) asymmetric information.
C) symmetric information.
D) complete information.

Question

Quizplus · Accepted Answer

Asymmetric information characterizes the transaction because the mechanic likely has more knowledge about cars and potential issues than Lenny does, creating an imbalance in information between the two parties.

Lenny, Who Has No Mechanical Knowledge of Automobiles, Takes His