When one party is better informed about an economic situation than another party, economists describe the problem as one of
A)asymmetric information.
B)confirmation bias.
C)political economy.
D)behavioral economics

Question

Quizplus · Accepted Answer

The situation described is an example of asymmetric information, where one party has more information than the other. This creates an imbalance in the transaction and can lead to adverse selection, moral hazard, and other problems in the marketplace. Confirmation bias, political economy, and behavioral economics are not directly related to this particular situation.

When One Party Is Better Informed About an Economic Situation