| Question |
Each of the following is an example of (or would lead to) a particular type of market failure arising from information asymmetry. Identify the type of market failure and justify your answer briefly. a. A woman in the “dating market” complains, “All the good ones are taken.” b. A college announces a new policy: Any senior with a GPA less than 2.0 will, upon graduation, have all grades of C – or lower retroactively raised to a grade of C. c. A restaurant in New York hires workers to pass out fliers to pedestrians all over the city, and pays them based on how many fliers they get into people’s hands. |
