The difference between moral hazard and adverse selection is that moral hazard is about:
A. actions that arise after the parties enter an agreement
B. unobserved characteristics of people occurring before parties enter into an agreement.
C. never happens when adverse selection is a problem.
D. None of these statements is true.
Answer: A
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The demand for gasoline is perfectly inelastic because most people need gasoline to drive their cars
Indicate whether the statement is true or false
An example of a time series data set is one for which the:
a. data would be collected for a given firm for several consecutive periods (e.g., months). b. data would be collected for several different firms at a single point in time. c. regression analysis comes from data randomly taken from different points in time. d. data is created from a random number generation program. d. use of regression analysis would impossible in time series.