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In each of the following cases, identify whether the problem is adverse selection or moral hazard, and explain your answer. How might the problem be dealt with?
a. Rick has gotten a large advance to write a textbook. With the money in hand, he prefers spending his time sailing rather that sitting in his office working on th book.
b. David is trying to get a large advance to write a textbook. He knows, but publishers don't, that he did poorly on the writing portion of his entrance exam for graduate school.
c. Brenda is buying a life insurance policy. She knows that members of her family tend of die young.
d. Maria, who has a large life insurance policy, spends her vacation pursuing her favourite hobbies: skydriving, bungee jumping, and bull-fighting.
for each of the following describe some of the potential opportunity costsa. studying for your economics testb.
Should sports leagues be allowed to remain as cartels? More than 100 years ago, the American legislative leaders decided that it was necessary to pass laws prohibiting "...any combinations or conspiracies in restraint of trade." However, the professi..
Which of the following events may decrease market labor demand? Choose all that apply.
A New York Times editorialist recently advocated a cut in the payroll tax.
What is the implication for the real exchange rate if the PPP condition holds? Under what circumstances does the PPP theory explain how exchange rates are determined why is it not completely accurate all the time?
Illustrate what new decisions will you make regarding production levels and pricing for your Widget facility.
Illustrate what is Nurd's equilibrium level of income. Illustrate what is likely to happen in the coming months if the government takes no action.
A project has a net present worth of - $14000 as of January 1, 2018. If a 9% interest rate is used, what is the project NPW as od December 31, 2015?
Opportunity cost is associated with choosing a particular decision that is measured by the forgone benefits of the next-best alternative. What example would you pose to explain this?
Explain how much would the combined production of pineapples increase for the two islands due to trade. How much would the combined production of pearls increase.
Which information culture can cause an organization to have a great degree of difficulty operating.
Explain the role of the Federal Reserve, who monitors it and is it effective in its job? Evaluate one of the strategies of the Federal Reserve
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