2.2 - imperfect information Flashcards
1
Q
who are the economic agents
A
consumers
producers
government
2
Q
why do different agents have different interpretations of utility
A
value judgements, different ways to maximise their utility
eg - some consumers will prefer financial security by saving while others will prefer to buy lots of clothes
3
Q
why can’t economic agents always maximise utility
A
imperfect information
4
Q
why is asymmetric information a problem
A
it limits economic agents from action rationally
