Mr.Smith,who knows the proposed site of a major new highway,buys a ranch from Mr.Jones,who never reads the newspapers.This is an example of:

Question

Quizplus · Accepted Answer

This is an example of asymmetric information, where one party (Mr. Smith) has information that the other party (Mr. Jones) does not have. The information about the highway would affect the value of the ranch, and Mr. Jones may not have sold the ranch if he knew about the proposed highway.

MrSmith,who Knows the Proposed Site of a Major New Highway,buys