Adverse selection is a problem that arises in markets where:
A) the seller kars mare about the attributes of the gode being sold than the buyer does
B) the buyer kows more about the attributes of the good being sold than the seller does
C) only used cars are baught and sald
D) both buyers and sellers heve the smme kowledge about the attributes of the good

Question

Adverse selection is a problem that arises in markets where:
A) the seller kars mare about the attributes of the gode being sold than the buyer does 
B) the buyer kows more about the attributes of the good being sold than the seller does 
C) only used cars are baught and sald
D) both buyers and sellers heve the smme kowledge about the attributes of the good

Quizplus · Accepted Answer

Adverse selection occurs when one party in a transaction has more information about the product than the other, typically the seller knowing more than the buyer, leading to potential market inefficiencies.

Adverse Selection Is a Problem That Arises in Markets Where