1
Q
What is information failure/ gap?
A
Not everybody has access to or knows all the information needed to make a decision to maximize welfare, caused by asymmetric information
2
Q
What is asymmetric information?
A
The buyer or seller has more information than the other and uses it to exploit the other
3
Q
What is the principal-agent problem?
A
The principal fails to see the benefits of something so allocates minimal resources toward it. The agent now has to encourage the principal to allocate resources to that something.
4
Q
Examples of asymmetric information?
A
Education (principal-agent problem)
Pension
Drugs
Financial Services
Adverts
A Level Economics
flashcards
Decks in class (36)
# Cards
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Chapter 16
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Chapter 25
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Chapter 311
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Chapter 414
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Chapter 59
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Chapter 79
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Chapter 88
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Chapter 99
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Chapter 106
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Chapter 117
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Chapter 123
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Chapter 135
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Chapter 148
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Chapter 152
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Chapter 164
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Chapter 179
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Chapter 184
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Chapter 194
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Chapter 2010
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Chapter 218
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Chapter 228
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C22 Measuring economic growth7
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C23 Aggregate Demand7
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C24,C25 Consumption and Investment16
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C26 Government Expenditure7
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C27 Aggregate Supply7
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C28,C29,C30 ,Equillibrium and National Output,National Income,The multiplier12
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C31 - C33 Economics Growth13
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C34 Inflation16
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C35 Unemployment19
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C36 Balance of Payments11
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C37 Macro economics objectives11
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C38 Demand side policies36
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C39 Supply Side Polices20
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C40 Possible Macro Economic Objectives and Conflicts9
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Chapter 482
