Which one of the following is an example of asymmetric information?
A) Martine is buying a house and is told that it has a new roof. The seller does not tell her that although the front part of the roof is new, the back part of the roof is 30 years old.
B) Bart is buying a new car that has had no previous owners and no accidents.
C) Joanne has been rehired by a firm where she used to work, and thus the managers are aware of her abilities.
D) Demetri's parents are buying a new car and are selling their old car to him. He has driven their car on numerous occasions.
Correct Answer:
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Q1: _ occurs when one party in an
Q2: Asymmetric information is a situation where:
A) there
Q3: Adverse selection occurs in a situation where:
A)
Q4: _ occurs when one party in an
Q5: _ is a situation where buyers and
Q7: Joshua buys a secondhand dresser over the
Q8: Mary applies for a personal bank loan
Q9: Assuming that information is symmetrical in the
Q10: Assuming that information is symmetrical in the
Q11: Assuming that information is asymmetric in the
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