The importance of information for decision making
Good decisions require accurate information. When people lack full information, they make choices that leave them worse off than they could be.
Real World
When the UK government rolled out the Help to Buy scheme, many first-time buyers lacked information on long-term costs, leading to purchases of overpriced new-builds that fell in value.
Exam Focus
Distinguish imperfect information (everyone lacks data) from asymmetric information (one party knows more) — examiners penalise conflation.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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