Information gap Flashcards
(5 cards)
1
Q
Information Gap
A
When consumers or producers lack the information needed to make an informed decision.
2
Q
Asymmetric information
A
When one party has more information than the other in a transaction
3
Q
Incomplete information
A
When an individual does not know the cost or benefits of making their decison.
4
Q
How does the government deal with underconsumption?
A
1) Regulation (Children have to stay in school until 18)
2) Providing information/ Adverts
3) Subsidising goods such as education (Price is lower increases qd)
5
Q
How does the government deal with overconsumption?
A
1) Regulation- banning cigarettes in public spaces
2) Providing information/ adverts(e.g. “Smoking can kill”)
3) Taxation ( Increases price decreases quantity)
