Relating to the Economics in Practice on page 356: An individual with a parent who has Huntington's disease has a 50 percent chance of also having the disease, and can use this information when deciding on the purchase of health insurance. This is an example of ________ favoring potential insurance buyers.
A) moral hazard
B) asymmetric information
C) market signaling
D) adverse selection

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one party in a transaction has more or better information than the other, such as an individual knowing their genetic risk for a disease when purchasing health insurance.

Relating to the Economics in Practice on Page 356: an Individual