Unit 2: Microeconomics
Topic 2.10: Market Failure — Asymmetric Information Questions
Practice 20 exam-style questions for IB Economics Topic 2.10. Review the question stems below, then unlock the full Question Bank to access markschemes, model answers, and AI grading.
34 marks
Explain two ways in which government intervention can reduce asymmetric information.
Markscheme and model answer locked
Unlock Question41 mark
Moral hazard is a problem of asymmetric information that occurs when:
Markscheme and model answer locked
Unlock Question54 marks
Explain two ways in which government intervention can reduce asymmetric information.
Markscheme and model answer locked
Unlock Question64 marks
Explain the concept of moral hazard using an example from everyday life.
Markscheme and model answer locked
Unlock Question74 marks
Explain two market-based solutions to the problem of asymmetric information.
Markscheme and model answer locked
Unlock Question84 marks
Explain two market-based solutions to the problem of asymmetric information.
Markscheme and model answer locked
Unlock Question91 mark
Insurance companies require medical examinations before issuing life insurance policies. This is an example of:
Markscheme and model answer locked
Unlock Question104 marks
Using the example of health insurance, explain the problem of adverse selection.
Markscheme and model answer locked
Unlock Question111 mark
One way to reduce asymmetric information in markets is through:
Markscheme and model answer locked
Unlock Question121 mark
Warranties offered by sellers of used cars are an example of:
Markscheme and model answer locked
Unlock Question134 marks
Explain how reputation mechanisms and online reviews help reduce asymmetric information.
Markscheme and model answer locked
Unlock Question151 mark
The market for second-hand cars is often cited as an example of asymmetric information because:
Markscheme and model answer locked
Unlock Question161 mark
Moral hazard is a problem of asymmetric information that occurs when:
Markscheme and model answer locked
Unlock Question174 marks
Explain the concept of moral hazard using an example from everyday life.
Markscheme and model answer locked
Unlock Question184 marks
Using the example of health insurance, explain the problem of adverse selection.
Markscheme and model answer locked
Unlock Question194 marks
Define asymmetric information and explain how it can lead to market failure.
Markscheme and model answer locked
Unlock Question204 marks
Explain how reputation mechanisms and online reviews help reduce asymmetric information.
Markscheme and model answer locked
Unlock QuestionReady to practice Topic 2.10?
Get instant AI feedback on your answers, view detailed markschemes, and track your progress across all IB Economics topics.
Start Practising Now