Information asymmetry causes:

a. market disequilibrium.

b. consumer surplus.

c. price-fixing.

d. deadweight loss.

Question 21 pts

Goods that are most likely to cause information asymmetry are:

a. search goods.

b. experience goods.

c. post-experience goods.

d. All of the above.

Which of the following are examples of self-insurance?

a. borrowing

b. drawing on savings

c. receiving unemployment insurance

d. both a and b

e. both b and c

Question

Which of the following is true if the insurance market is efficient?

a. The deductibles eliminate moral hazard.

b. Society as a whole engages in less risky behavior.

c. It transfers risk from those who most want to get rid of it to those least bothered by the risk.

d. Premiums are always kept to the level of a fair insurance policy.