Recall the Application about the free-agent market for professional baseball pitchers to answer the following question(s).
-Recall the Application.In the market for used baseball pitchers,
A) free agency has eliminated the adverse selection problem.
B) pitchers who switch teams are generally healthier than those who do not.
C) asymmetric information leads to adverse selection.
D) both A and B

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where one party has more or better information than the other, which can lead to adverse selection. In the case of the free-agent market for professional baseball pitchers, teams may not have complete information about a pitcher's health, performance, or potential, leading to adverse selection. Therefore, free agency does not eliminate the adverse selection problem, and choice C is the correct answer. Choice A is incorrect because free agency does not eliminate adverse selection. Choice B is not supported by the information provided in the application.

Recall the Application About the Free-Agent Market for Professional Baseball