Which of the following is not an example of asymmetric information?
A)When someone is applying for a job, the employer checks references to determine the previous work habits of the applicant.
B)When an employee purchases group life insurance without taking a physical exam, she knows more about her health than does the insurance company.
C)When someone is considering buying a used car from a dealership, the dealer knows more about the true condition of the car than does the potential buyer.
D)All of the above are examples of asymmetric information.

Question

Quizplus · Accepted Answer

In option A, both parties (the employer and the job applicant) have access to the same information (the references). In options B and C, one party (the employee or the dealer) has more information than the other party (the insurance company or the potential car buyer) which creates asymmetric information. Option D is not the correct answer as all three options B, C, and D are examples of asymmetric information.

Which of the Following Is Not an Example of Asymmetric