2.9 - info failure

Question 1

Information failure

Answer 1

Type of market failure
When consumers / producers have a lack of information on economic decisions

Question 2

Asymetric information

Answer 2

When one party has access to info that another party doesn’t

Question 3

Moral Hazard

Answer 3

Incentives to alter behaviour when the consequences of their risks does not incur to them but someone else

Question 4

Demerit goods

Answer 4

Goods which are harmful to the consumer
May not know this / choose to ignore this fact

Question 5

Merit goods

Answer 5

Goods which are positive to the consumer