23) Imperfect Market Information

Question 0

What does asymmetric info mean

Answer 0

⚫️buyers and sellers
➡️have different amount of info
➡️e.g. Producers know more than consumers

Question 1

What does symmetric information mean

Answer 1

⚫️buyers and sellers
➡️have access to same amount of info
➡️about producers

Question 2

Whats the disadvantage of asymmetric info

Answer 2

⚫️can distort people incentive 
➡️to buy and sell goods and services
➡️at right price
➡️can lead to misallocation 
➡️and market failure

Question 3

What are the other causes of imperfect information

Answer 3

⚫️uncertainty about costs and benefits

⚫️misleading info

Question 4

Give an example of u certainty of costs and benefits on education

Answer 4

⚫️have limited information
➡️of benefits of education

⚫️How much will you earn in the future
➡️as a result of studying economics now
➡️can lead to 
➡️under-consumption of merit goods
➡️and over consumption of demerit goods
➡️creating a misallocation of resources

Question 5

How is misleading info a cause of imperfect information

Answer 5

⚫️many tobacco company knew the link
➡️between tobacco and lung cancer
➡️before consumers were aware of this

➡️continued to advertise as health and sociable
➡️leading to over consumption of tobacco
➡️causing misallocation of resources