Micro: 1.3.4 Information gaps Flashcards
1
Q
What is perfect and symmetric information?
A
It means that consumers and producers have the same level of knowledge about the products and know everything there is to know about them.
2
Q
What is asymmetric information?
A
It occurs when producers know more than consumers, or when the information is incomplete or imperfect.
3
Q
What are examples of imperfect information?
A
Examples include over-consumption of tobacco or alcohol and under-consumption of healthcare or education.
Other examples include the financial sector, pensions, insurance, and the used car market.
