2.9 Information failure Flashcards
1
Q
Asymmetric information
A
Where one party has more information than the other, leading to market failure
2
Q
Demerit goods
A
Goods with negative externalities
3
Q
Information failure
A
When an economic agent lacks the information needed to make a rational, informed decision
4
Q
Merit goods
A
Good with positive externalities
5
Q
Moral hazard
A
Where individuals make decisions in their own best interests knowing there are potential risks for others
