Adverse Selection Arises When

Multiple Choice

Adverse selection arises when:

A) the wants of both parties are aligned with one another.
B) buyers and sellers have different information about the quality of a good or the riskiness of a situation.
C) buyers and sellers with the same information about the quality of a good or the riskiness of a situation seek each other out.
D) people behave in a riskier way because they have incomplete information.