Question

QUESTION 7 Peter has a really terrible toothache and decides to go and see Marge, his dentist. Marge recommends Peter has all his back teeth removed and a partial denture put in. This procedure would be very expensive and Peter is unsure what to do Which of the following statements are true: Peter, as a consumer, is fully informed and therefore can weigh up the known costs and benefits and make a decision. Peter should go to every other dentist in his area to gain other opinions before he makes the decision. Peter may not be getting the optimal dental care due to Marge possessing more information than Peter. This is an example of a Lemons Market as Marge is trying to pass off a lower quality product as the best one for Peter.

Answer 1

Statements 2nd and 3rd are true for this example. Here the consumer is not fully informed. Since information assymetry is there he can consider rakita other dentists' opinion.

Because his dentist has more information, he may not be getting optimal care. Therefore, statement third is also correct.