The Tendency for People to Enter into Agreements in Which

question 173

Multiple Choice

The tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party is known as

• A) adverse selection
• B) moral hazard.
• C) the market for oranges.
• D) a signal.

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Definitions:

Oranges

A citrus fruit known for its juicy segments and sweet to slightly sour taste, often consumed fresh or squeezed for juice.

Peaches

A sweet, juicy fruit with fuzzy skin and a stone or pit in the center, commonly eaten fresh or used in cooking and baking.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, representing the cost of sacrificing the next best choice.

Oranges

A citrus fruit rich in vitamin C, grown in warm climates, and consumed either fresh or in juice form.