Answer the following statements true (T) or false (F)

1. When the government bails out failing banks, it creates a moral hazard problem; but when the government bails out homeowners who are defaulting, there is no moral hazard problem.
2. When critics of unemployment insurance claim that some of the unemployed are not exerting much effort to find jobs because of the unemployment benefits, they are referring to the moral hazard problem.
3. E-bay and Amazon provide "sellers' ratings" information based on the experiences of past buyers. This is to help resolve the adverse selection problem faced by potential buyers.
4. An example of an adverse selection problem is in insurance, where the people most likely to claim insurance payouts are the people who will seek to buy the most generous policies.


1. FALSE
2. TRUE
3. TRUE
4. TRUE

Economics

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The set of acquired skills and abilities that workers bring to the production of goods and services is:

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Economics

Based on the following game, what are the secure strategies for player 1 and player 2?Player 1Player 2??t1t2?S110,1515,8?S2-10,710,20

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Economics