the government is better informed than either of the two par

the government is better informed than either of the two parties. Question 34 2.5 pts Government action in cases of asymmetric information may not be an ideal solution because O the private market can sometimes deal with information asymmetries on its own. the government tends to have more information than private parties. O both (a) and (b) O None of the above is correct. D | Question 35 2.5 pts Which of the following relationships involves asymmetric information? O Patients can look up information regarding certain prescription drugs giving them the same information as their doctors. Consumer Reports allows customers of DVD players to know as much about the quality of various players as the store salesperson.

Solution

34.a) the private market can deal with information asymmetries on its own

This is a situation of imperfect knowledge. It can lead to adverse selection.

35. Not examples of asymmetric information

If this information was not available; it is an example of information asymmetry

It is the study of decisions in transactions.