Adverse selection occurs when an agreement encourages undesirable behavior
Indicate whether the statement is true or false
False. This is a moral hazard. Adverse selection occurs if the offer to make an agreement attracts a certain type person who undertakes the undesirable behavior anyway.
Economics
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Mark owns a ranch in Colorado that costs $3.76 million per year to operate. Of that, his explicit cost equals $3.29 million. Therefore his actual monetary cost of running the ranch is:
a. $3.29 million. b. over $7 million. c. $470,000. d. $3.76 million.
Economics
An income tax provides an incentive to _____
a. work for large companies b. increase investment c. substitute away from being self-employed d. consume more and save less
Economics