________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

Question

Quizplus · Accepted Answer

Adverse selection occurs when one party has more information about the quality of a good or service than the other party, leading to one party taking advantage of the other. This is commonly seen in the insurance industry, where individuals with higher risk are more likely to purchase insurance, leading to higher premiums for everyone.

________ Occurs When One Party Takes Advantage of Having More