________ exist(s)whenever one party has more information than the other party.

Question

Quizplus · Accepted Answer

Asymmetric information exists when one party in a transaction has more information than the other party. This can result in an imbalance of power and lead to inefficiencies in markets. Moral hazard refers to the risk that a party will take advantage of a situation because they are protected from the potential consequences, while diminishing returns refer to the marginal decrease in output as the input of a factor of production is increased. Immoral hazard is not a commonly used term in economics, and symmetric information refers to a situation where both parties in a transaction have equal access to information.

________ Exist(s)whenever One Party Has More Information Than the Other