Assignment
Asymmetric information is a problem in many markets, such as the used car market, the insurance markets, and the credit markets. Consider the used car market, and by integrating some of the concepts you learned from this module, discuss the questions below:
· What is the market response to asymmetric information?
· What is the market response to adverse selection?
· What is the market response to moral hazard?
· Do you think that education is a “market signal” that can help companies make better economic decisions when asymmetric information exists?
· What would be the market response if there was perfect information?
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economics_c5.docx
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