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Microeconomics, its asymmetric information and its adverse selection –
1.    Microeconomics:
Microeconomics as the term defines is the study of individual behaviour of producers, individuals and workers who plays an important part in the market. It is the ability of an individual, as mentioned before, to achieve their needs and requirements in exchanges in the market along with effective resource allocation that has focus on equity.

2.    Asymmetric information:
Asymmetric information as a part of microeconomics will focus on the fact that any single party out of the two in the market (buyers and sellers), either one would have better information than the other while making any decision or any kind of transactions. These kind of imperfect informations cause a misbalance of power both from seller’s and buyer’s point of view.

3.    Adverse selection:
Adverse selection can be defined as the inclination of those high risked jobs and lifestyles that could gain life insurance. It can be a situation where a seller has information that may not be there with buyers or vice versa about certain characteristics of the quality of product. It is a critical situation where a person who is insured faces the probability of any kind of loss due to some risks that was not factored during its sale.

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