Question

In the context of education and health services, information asymmetry means that:

Options

• Information is equally distributed between providers and consumers

• The government has complete information about all services

• Consumers have more knowledge than service providers

• Service providers have more knowledge than consumers

Answer 1

Information asymmetry exists when service providers have more knowledge than consumers. In education and health, doctors and institutions know far more than patients and students, leaving consumers unable to judge service quality fully.