Information gaps
What Information gaps means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Information gaps
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Reference: Pearson Edexcel
A situation where buyers or sellers lack the necessary data to make fully informed economic decisions, leading to irrational decisions and a misallocation of resources.
When governments lack the accurate data needed to set optimal taxes or quotas, leading to over- or under-correction of the market failure.
The provision of information corrects information gaps, helping consumers make rational choices.
Topics that use Information gaps
- Government intervention and failure (Pearson Edexcel A-Level)
- Market failure in society (Pearson Edexcel A-Level)
- Policies to deal with market failure (Pearson Edexcel A-Level)
Related terms
- Resource allocation
- Demerit goods
- Externalities
- Government failure
- Government intervention
- Indirect taxation
- Information failure
- Market failure
Using Information gaps in the exam
Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.
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