Define adverse selection and explain how it is caused by asymmetricinformation

Q: You need to paint your fence but you really hate thistask. You decide to hire the kid next door to d...

A: I will tell my friend to assure her that i did not cheat the kid next door by telling her that it is...

Q: 56. Table 3.10 shows the supply and demand for movie tickets in a city. Graph demand and supply and ...

A: Equilibrium occurs at the point where the demand and supply intersects with each other. The demand a...

Q: What happens to the real GDP if the government increases spending by $50 million and the government ...

A: Government multiplier (k)  = 1.5 Government spending (G)  = $50 million

Q: Normally, the people of COVID-FREE LAND demand of 3,000 sanitizers and 18,000 toilet rolls. Suddenly...

A:   Meaning of Production Possibility Curve or Frontier: The production possibility frontier is a curv...

Q: The HIV/AIDS crisis has been called the worst pandemic since the fourteenth century’s Black Plague. ...

A: Reimportation refers to the importation of a good into an economic region or country that was previo...

Q: An economy is currently experiencing inflation that exceeds the target rate set by the central bank....

A: Inflation is the increase in the level of price. If an economy faces inflation which exceed the targ...

Q: In a Mixed Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific ...

A:   Meaning of Specific Factor Model: The specific factor model refers to the assorted kind features i...

Q: In a Mixed Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific ...

A: Option __B (Owners of A will benefit)__ is the correct answer.

Q: How does logistics contribute to time and place utility?

A:   Meaning of Time and Place Utility: Place utility refers to when the manufacturer provides the fini...

Q: If deposits in the banking system are $540, while the reserve ratio is 0.2 and the currency to depos...

A: The sum of banking reserves and the currency in circulation referred to as high-powered money.

Q: Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by or wall scrubber...

A: The marginal cost is the additional cost incurred when the producer of the good produces an addition...

Q: In the Pure Specific Factors model with two sectors, Cars (C) and Wheat (W), Capital (K) is specific...

A: The specific factor model assumes that the economy produces two goods (cars and wheat), and the econ...

Q: Vik and Fleet produce trainers in the sports-shoe market. For one of their main productsthey have th...

A: According to question given that demand for the Vik and fleet in the sports shoe market. Vik Pv =175...

Q: Which of the following would likely cause a decrease in the amount Supplied for a particular good, i...

A: A)A decrease in the cost of any factors of production used to produce the good i.e.the input prices ...

Q: Distinguish between Gross Domestic Product (GDP) and Gross National Product (GNP). What are the basi...

A: National Income at Current Price: The commodities produced in a country during a particular period a...

Q: Solve

A: The production function is given as, `Y=K0.5L0.5 where the K is the amount of capital and L is the a...

Q: Suppose there are two countries Peru and Japan that produce Food and Fuel. Peru can produce 7,523 un...

A: The cost of producing 1 unit of food in terms of how many fuels can be calculated as follows: Countr...

Q: Calculate the net value added at MP from the following data. Depreciation =  $5 billions Sales = 100...

A: Given information: Depreciation =  $5 billions Sales = 100 Opening stock = 20 Intermediate consumpti...

Q: TRUE OR FALSE (give the reason if the answer is false) 1. Increasing in the skirt price by 20% led ...

A: Price elasticity refers to the responsiveness of the quantity demand due to change in price. If the ...

Q: 3-17 You are planning to withdraw $100 in Year 1, $150 in Year 3, and $200 in Year 5. At a 5% intere...

A: Given:Year=1, FV=$100Year=3, FV=$150Year=5, FV=$200i=5%

Q: What are the benefits gained by using MyFloridaMarketPlace portal?

A: MyFloridaMarketPlace (MFMP) is an award-winning eProcurement system of Florida state. The MFMP porta...

Q: Explain why money is worth more now than in the future, and how theinterest rate represents this rel...

A: The time value of money refers to the idea that a unit of money is worth more in the present period ...

Q: “In the past 15 years, technological advancements have led to an increase in the production of compu...

A:   Meaning of Demand: Demand for a commodity refers to as the desire to buy a commodity-backed with s...

Q: 1. What is price of elasticity? Explain many types of price elasticity and give complete your answ...

A: Elasticity is basically defined as the change in a variable which is in response to a change some an...

Q: Which of the following statements is correct? (2)(1) When a British firm invests in a bicycle manufa...

A: The nominal gross domestic product of an economy is the aggregate value of all final goods and servi...

Q: 14 12 14 b. What is true about marginal revenue and marginal costs when profit is maximized? c. What...

A: Under perfectly competitive markets, the price and marginal revenue curves coincide with one another...

Q: . What is fixed cost? How would you calculate Fixed cost in a graph?

A: Total Cost has two components in the short run  1)Total Fixed Cost and 2)Total Variable Cost . Each...

Q: 5. Tony’s preferences for apples (qa) and pies (qi) are captured by the utility functionU(qa, qi) = ...

A: Given:Tony’s preferences for apples (qa) and pies (qi) are captured by the utility function U(qa, qi...

Q: Rubyhas just finished her economics exam and must decide whether to spend two hours going to the bea...

A: Marginal utility refers to the value of additional utility that derived from the consumption of one ...

Q: Suppose the current CPI is 252 and in 2005 it was 196. A pair of Levi’s jeans costs $43 today. Based...

A: A price index number is a macroeconomic measure that compares a series of prices in different time p...

Q: Table 7P - 1 shows the price of inputs and the price of outputs at each step in the production proce...

A: Gross domestic product (GDP) is the monetary value of all final goods and services produced in a cou...

Q: Q.1.5 and Q.1.6 are based on the following information about an economy that produces the following ...

A: Answer: Given: Price and quantity in 2018 (Base year): Price and quantity in 2019: Nominal GDP: it ...

Q: Explain it correctly.  Not solve in excel works. Typed or handwriting use onlys.

A: Present value or present worth is the current value of future cash flow streams using a given intere...

Q: You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sal...

A:   Answer:  Step 1: Given, The selling price of products = $10 The constant marginal cost = $8 Fixed ...

Q: Chandra received a gift certificate that covers threesalsa dance lessons. After the first lesson, Ch...

A: The opportunity cost is that cost which must be given up to get something desirable.

Moral Hazard

The moral is a person's behavior towards himself /herself, society, organization, and others. Hazard is something that is happening and is not good. A person may be morally good or bad. It depends on his attitude, ethics, integrity, and values. A person may have the highest reverence for money to that for the truth. In this case, the person may lie and it is said that the person is morally bad.