Question

why the government may be able to reduce the losses due to adverse selection and moral...

why the government may be able to reduce the losses due to adverse selection and moral hazard? please explain in detail in word. not in handwriting

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Because it can reduce the severity of ASSYMETRIC information. E. G it can keep record of accidents suffered by various drivers and the no. Of times they have exceeded speed limit. This will reduce problem of adverse selection as frequent offenders will not be insured by insurance companies. It will also reduce moral hazard since drivers know their driving behaviour will be recorded and thus they will drive carefully to get future insurance benefits. Govt has enough authority to implement laws and policies to reduce problem of ASSYMETRIC information.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Topic: Moral hazard/adverse selection confusion A researcher may have difficulty separating moral hazard from adverse selection....
Topic: Moral hazard/adverse selection confusion A researcher may have difficulty separating moral hazard from adverse selection. Use an example to show why this may be the case.
Many colleges offer pass/fail classes. Use the economic concepts of adverse selection and moral hazard to...
Many colleges offer pass/fail classes. Use the economic concepts of adverse selection and moral hazard to explain what may be the potential drawbacks or shortcomings of utilizing such a grading system
There is frequent confusion about the terms asymmetric information, moral hazard, and adverse selection. Asymmetric information...
There is frequent confusion about the terms asymmetric information, moral hazard, and adverse selection. Asymmetric information is the cause, while moral hazard and adverse selection are the outcome. For this discussion, your focus will be to think through what these have to do with hiring a police officer. Instructions Consider the following statement: Many police officer positions require the applicant to have a college degree even though the tasks of a police officer rarely call upon college course material. In...
Define ‘financial market’. How (a) moral hazard and (b) adverse selection can affect financial market stability?...
Define ‘financial market’. How (a) moral hazard and (b) adverse selection can affect financial market stability? – Explain
Does universal health care solve either the moral hazard or the adverse selection problem or both?
Does universal health care solve either the moral hazard or the adverse selection problem or both?
a)According to wealth substitution effect, private saving increases due to social security taxes. b)Government’s health care...
a)According to wealth substitution effect, private saving increases due to social security taxes. b)Government’s health care program can solve both moral hazard and adverse selection problems. c)The only reason why countries have social security is to improve the economic status of the aged STATE whether the statement is True or False or Uncertain. explain in detail please
Explain precisely how and why the moral hazard may arise in rural land contract in developing...
Explain precisely how and why the moral hazard may arise in rural land contract in developing countries.
Answer whether the statement is True or False or Uncertain. EXPLAIN in detail. According to the...
Answer whether the statement is True or False or Uncertain. EXPLAIN in detail. According to the wealth substitution effect, private saving increases due to social security taxes. Government’s health care program can solve both moral hazard and adverse selection problems. The only reason why countries have social security is to improve the economic status of the aged. As education is a private good, the government should not provide it. Individuals always prefer cash-transfers to in-kind transfers.
STATE whether the statement is True or False or Uncertain. EXPLAIN in detail. According to wealth...
STATE whether the statement is True or False or Uncertain. EXPLAIN in detail. According to wealth substitution effect, private saving increases due to social security taxes. Government’s health care program can solve both moral hazard and adverse selection problems. The only reason why countries have social security is to improve the economic status of the aged. As education is a private good, government should not provide it. Individuals always prefer cash-transfers to in-kind transfers.
One point each; absolute word limits; any response exceeding limit will be scored zero You are...
One point each; absolute word limits; any response exceeding limit will be scored zero You are manager of Dave’s FunTime Bar and Grill. You are hiring new bartenders and servers 1. Who is the principal? [limit 1 word] 2. Who are the agents? [limit 2 words] 3.  Why would you worry about adverse selection when hiring new bartenders and servers? [limit 15 words] 4. What could you do to reduce adverse selection when hiring these employees? [limit 15 words] 5. Why...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT