After buying a used car, you find out that there were many hidden problems. If you knew these issues before, you would not have offered so much for it. This is a typical example of what economists call
A) people being people.
B) untrustworthy sellers.
C) asymmetric information.
D) adverse selection.

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one party in a transaction has more or superior information compared to another. In this scenario, the seller had more information about the car's condition than the buyer, leading to a decision the buyer might not have made if they had the same information.

After Buying a Used Car, You Find Out That There