Question

which of the following problems are created by an information asymmetry? A. moral hazard b. adverse...

which of the following problems are created by an information asymmetry?

A. moral hazard

b. adverse selection

c. both of these

d. none

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer to the above-mentioned question is an option (c) that is both of these. ( moral hazard and adverse selection )

Meaning of information asymmetry

It arises when a party transaction of economic own more substance knowledge as compared to another party. Nearly all of the transaction intricate the information asymmetry. This term is furthermore also read as " information failure".

  

Apart from the moral hazard and adverse that is unfavourable selection, monopoly of intelligence is also extensively except the example of information asymmetry.

Example - Selling a car, the seller holds the full knowledge.

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.
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...
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?
"Public provision of health care financed through taxes should overcome the problems of Moral Hazard and...
"Public provision of health care financed through taxes should overcome the problems of Moral Hazard and Adverse Selection." Discuss this statement.
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
Firms that hire outside consultants can reduce the impact of moral hazard by: A. hiring work...
Firms that hire outside consultants can reduce the impact of moral hazard by: A. hiring work on a fixed-fee basis B. monitoring the quality of the completed work C. hiring consultants with an established reputation for not shirking D. All of the above A business owner attains a bank loan to purchase a new delivery truck for the business, but they use the funds to take a vacation to Australia. Which of the following terms describes the problem with this...
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
1. Which of the following actions would NOT tend to reduce the moral hazard problem in...
1. Which of the following actions would NOT tend to reduce the moral hazard problem in deposit insurance? a. Implementation of risk-based premium. b. Elimination of deposit insurance. c. Reduction of the insurance coverage. d. Introduction of voluntary membership. ___ 2. The Governor of the Federal Reserve System obtain their position through: a. appointment by the U.S. Senate b. appointment by the Chairman of the Board of Governors c. appointment by the U.S. president d. appointment by the directors of...
Which of the following, if any, constitute moral hazard? (check all that apply) a) Purchases of...
Which of the following, if any, constitute moral hazard? (check all that apply) a) Purchases of securities by the Fed b) Accepting higher risk on the promise that another party will pay c) Possibility of the other party not following through on their contractual obligation d) none
Question 7 (1 point) Which of the following statements is false? Question 7 options: Asymmetric information...
Question 7 (1 point) Which of the following statements is false? Question 7 options: Asymmetric information can exist both before and after a transaction. Moral hazard occurs when one party to a transaction changes his or her behavior in a way that is hidden from and costly to the other party. Adverse selection has the potential to eliminate some markets. none of the above
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT