Markets that are more likely to be subject to adverse selection problems are those where:
A) information is easily available to consumers and sellers.
B) there is an imbalance of information between buyers and sellers
C) the goods sold in that market are highly uniform in quality.
D) the market relies on independent certifiers of quality.

Question

Quizplus · Accepted Answer

Adverse selection occurs when one party has more information than the other party in a transaction. Therefore, markets where there is an imbalance of information between buyers and sellers are more likely to be subject to adverse selection problems.

Markets That Are More Likely to Be Subject to Adverse