1. Describe when asymmetric information exists. 2. Explain under what condition asymmetric information leads to market failure....

Question:

1. Describe when asymmetric information exists.
2. Explain under what condition asymmetric information leads to market failure.
3. Name the asymmetric information problem that exists prior to an exchange.
4. Name the asymmetric information problem that exists after an exchange.
5. Describe the problem of adverse selection.
6. Describe the problem of moral hazard.