Moral hazard and adverse selection are both examples of:
a. the principal-agent problem.
b. asymmetric information.
c. externalities in consumption.
d. perfect information.
e. efficiency in markets.
b. asymmetric information.
You might also like to view...
If you use a check to pay your monthly rent,
A) the check is considered money because you received something in return. B) the check is not money because it is just an instruction to your bank to make a payment. C) you have used money because the landlord accepted it as a means of payment. D) the check becomes money when it arrives at the landlord's bank. E) the check is not money because it is not part of M1.
What is an incentive system?
What will be an ideal response?
The term "fixed cost" refers to the cost a firm incurs to produce a specific fixed quantity of output
Indicate whether the statement is true or false
In general, pollution is economically inefficient because _____
a. people do not like breathing bad air b. it is a byproduct of a market exchange c. producers are only pursuing their own self-interests d. producers do not have to internalize the opportunity cost of clean air