Question 1
What is meant by symmetric information?
A.
Buyers and sellers have same knowledge. B.
Behaviour changes when insured. C.
Worst risks most likely to buy insurance. D.
Incomplete knowledge causing poor decisions.
Question 2
What is meant by used car market?
A.
Overconsumed due to information failure. B.
One party knows more than the other. C.
Incomplete knowledge causing poor decisions. D.
Seller often knows more than buyer — 'lemons' problem.
Question 3
What is meant by asymmetric information?
A.
Regulation and information campaigns. B.
Buyers and sellers have same knowledge. C.
One party knows more than the other. D.
Underconsumed due to information failure.
Question 4
What is meant by demerit goods?
A.
Seller often knows more than buyer — 'lemons' problem. B.
Regulation and information campaigns. C.
Incomplete knowledge causing poor decisions. D.
Overconsumed due to information failure.
Question 5
What is meant by market failure?
A.
Overconsumed due to information failure. B.
Worst risks most likely to buy insurance. C.
Wrong quantity produced/consumed. D.
Underconsumed due to information failure.
Question 6
What is meant by imperfect information?
A.
Worst risks most likely to buy insurance. B.
Incomplete knowledge causing poor decisions. C.
Behaviour changes when insured. D.
Buyers and sellers have same knowledge.
Question 7
Asymmetric information means:
A.
One party knows more B.
Perfect knowledge C.
No trade D.
Only government trades
Question 8
Information gaps can cause:
A.
Market failure B.
Only inflation C.
Only growth D.
Always efficiency
Question 9
What is meant by adverse selection?
A.
Overconsumed due to information failure. B.
One party knows more than the other. C.
Worst risks most likely to buy insurance. D.
Seller often knows more than buyer — 'lemons' problem.
Question 10
What is meant by moral hazard?
A.
Underconsumed due to information failure. B.
Buyers and sellers have same knowledge. C.
Behaviour changes when insured. D.
Seller often knows more than buyer — 'lemons' problem.
Back to practice 