MICRO - LS19 - Information Gaps

Question 1

Perfect information

Answer 1

When a buyer and/or seller has a complete understanding of the quality and nature or a good or service

Question 2

Symmetric information

Answer 2

When buyers and sellers have equal amounts of knowledge about a good or service

Question 3

Imperfect information

Answer 3

When a buyer and/or seller lacks a complete understanding of the quality and nature of a good or service

Question 4

Asymmetric information

Answer 4

When a buyer or seller has more information about a good or service than the other party

Question 5

Information gap

Answer 5

When either the buyer or seller doesn’t have access to the information needed for them to make a fully-informed decision
- causes market failure

Question 6

What type of good is the NHS & state education and why?

Answer 6

Merit goods
There is rivalry in the consumption of these goods
They yield external benifits