When You Hire a Company to Paint Your House,you Cannot

question 44

Multiple Choice

When you hire a company to paint your house,you cannot be sure of the quality of paint that was used.This situation is an example of

• A) moral hazard.
• B) the adverse selection problem.
• C) the market for lemons.
• D) the principal-agent problem.

---

Definitions:

Radical Innovation

A profound or revolutionary change in technology, products, or processes that significantly transforms a market or industry.

Exploitation

The act of taking unfair advantage of someone or something, often for personal gain, at the expense of others' rights or well-being.

Design Thinking

is a problem-solving approach that involves empathy, creativity, and rationality to meet user needs and solve complex issues.

Line Extension

The addition of new products to an existing product line of a brand, often in the same product category, to target a wider audience or offer more variety.