Explain the notion of adverse selection for buyers
Week 11: Interactive activity
11.1 Learning Outcomes
1. Explain the notion of adverse selection for buyers
2. Discuss the possible responses to adverse selection for buyers
3. Explain the notion of moral hazard
4. Define a public good and the free rider problem5. Use the marginal principle to describe the optimum level of pollution
11.2 Action Required:
Reading
Read the following to prepare for this week:
- Survey of Economics, Chapter 9: Imperfect Information, External Benefits, and External Costs
Video:
Watch the following video(s), which you can access in the Weekly Media object or by clicking on the link(s) below: and answer the question.
MIT OpenCourseWare video lecture series, “Uncertainty”
11.3 Test your Knowledge (Question):
Question: Discuss how asymmetric information present in second hand car market, often leads to adverse selection for buyers.
11.4 Instructions
- Answer the question in test your knowledge section.
- Post your answer in the discussion board using the discussion link below (Week11: Interactive learning Discussion
Requirements: 100 or mor
Answer preview to explain the notion of adverse selection for buyers
APA
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