Imperfect Information

Question 1

Symmetric Information means Everyone has Equal and Perfect Knowledge

Answer 1

look on page 84

Question 2

Asymmetric Information involves a lack of perfect information in a market

Answer 2

look page 84

Question 3

Information failure causes market failure - imperfect info

Answer 3

look page 84
- imperfect info means that merit goods are underconsumed and demerit goods are overconsumed. There are many reasons why imperfect info affects consumption of merit and demerit goods

Question 4

Information failure causes market failure - information failure

Answer 4

look at page 84
- due to information failure, merit goods tend to be underprovided, causing a misallocation of resources and market failure. There are many reasons why imperfect info affects the provision of merit and demerit goods e.g. look in book