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1.2 Individual economic decision making (A-level only)

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Question 24

A collector is considering purchasing a vintage luxury watch from an online specialist dealer. The watch is advertised as being 'fully restored with 100% genuine vintage parts' and is listed at a correspondingly premium price.

In this situation, asymmetric information is most likely to lead the collector to:

A

purchase the watch because they assume the high price is a guarantee of its authenticity.

B

possess superior information regarding the watch's true service history compared to the dealer.

C

maximize their consumer surplus by negotiating a price below the market equilibrium for a brand new watch.

D

decide not to purchase the watch because they are unable to verify the dealer’s claims about its genuine condition.

Markscheme

1.2 Individual economic decision making (A-level only) Questions

  1. A Level
  2. /Economics
  3. /1.2 Individual economic decision making (A-level only)

45 exam-style questions on AQA A Level Economics 1.2 Individual economic decision making (A-level only), covering 1.2.1 Consumer behaviour, 1.2.2 Imperfect information, 1.2.3 Aspects of behavioural economic theory, and 1.2.4 Behavioural economics and economic policy. Each one has a worked solution and a mark scheme showing where the marks go.

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