Frequently It Is the Case That: (1) a Worker Knows

Multiple Choice

Frequently it is the case that: (1) A worker knows more than his employer about how much effort he puts into his job, and (2) the seller of a used car knows more than the buyer about the car's condition.

A) Neither (1) nor (2) serves as an example of asymmetric information.
B) Both (1) and (2) serve as examples of asymmetric information.
C) Neither (1) nor (2) serves as an example of a hidden action.
D) Both (1) and (2) serve as examples of hidden action.