Moral hazard is, in general, the asymmetric information problem that occurs
A) after a transaction is consummated.
B) due to a size difference in the parties to a transaction.
C) with equity financing.
D) before a transaction is consummated.
A
You might also like to view...
Suppose there are only two goods: guns and roses. If the relative price of guns falls, then the relative price of roses
a. must also fall. b. must rise. c. is unaffected. d. could rise, fall, or remain unchanged.
Beth can earn $7,500 by renting out her house. However, her neighbor keeps a pet dog that chases away whoever comes looking for the house. Because her neighbor has a right to keep his pet untied, Beth is unable to find a tenant
What is the efficient outcome in this case if her neighbor values keeping his pet free for $1,500?
Rent seeking:
A. results in more negative externalities. B. involves lobbyists influencing government policies to benefit their interests. C. results in less market share for the rent seekers. D. None of the statements are correct.
Artificial intelligence (AI) technologies
A. produce large volumes of data that make decision making more complicated. B. can enable individuals to make more informed decisions. C. often reveal economic relationships that do not actually exist. D. free businesses, governments, and consumers from making decisions.