A lender faces a(n) ________ problem when the lender lends funds to a borrower for a specific purpose and the borrower then opportunistically uses the funds for another purpose.
A. external cost
B. moral hazard
C. adverse selection
D. free?rider
Answer: B
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Based on the data in the above table, to assure that the efficient amount is produced the government can
A) subsidize the suppliers $8 per unit. B) subsidize the suppliers $2 per unit. C) tax suppliers $2 per unit. D) tax suppliers $8 per unit.
If an industry could be organized either perfectly competitively or as monopoly, a monopoly would
A) produce less output. B) produce where P > MC. C) charge higher prices. D) All of the above
Shortages are the same thing as excess:
A.) Supply caused by price floors. B.) Supply caused by price ceilings. C.) Demand caused by price floors. D.) Demand caused by price ceilings.
"No country is abundant in everything." Discuss
What will be an ideal response?