Which of the following does not illustrate the asymmetric information problem:
A. Ordinary financial investors do not know the motivations of financial advisers
B. Ordinary customers do not know how sanitarily the food is prepared in a restaurant
C. Ordinary stock-buyers do not know what will happen to the stock's price next week
D. Ordinary car buyers do not know the actual quality of the various cars in the dealer's lot
C. Ordinary stock-buyers do not know what will happen to the stock's price next week
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How can incomes become more unequally distributed within countries and less unequally distributed across countries?
What will be an ideal response?
Which of the following is an example of a transaction that is made even though complete information is not possible?
A. Joe buys a puppy in hopes that the puppy will be his hiking companion for the next 20 years. B. Mike saves his money by putting it in a mutual fund. C. Alex buys house insurance and has never filed a claim. D. All of these are examples of transactions that must be made with incomplete information.