Apportion the Indicated Number of Representatives to Two States, A

question 40

Multiple Choice

Apportion the indicated number of representatives to two states, A, and B, using Hamilton's plan. Next, recalculate the apportionment using Hamilton's plan for the three states, C and the original states. Decide whether the new states paradox occurs.

• A) C illustrates the new states paradox.
• B) A illustrates the new states paradox.
• C) A and C illustrate the new states paradox.
• D) B illustrates the new states paradox.
• E) The paradox does not occur.

Identify and describe the problems of adverse selection and moral hazard.

Interpret the role of market signals in mitigating issues related to information asymmetry.

Analyze measures that can reduce the effects of adverse selection in various markets.

Examine how moral hazard affects the behavior of individuals and institutions post-contract.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, out of its profit or reserves, usually on a regular basis.

Investment

The allocation of resources, usually money, in order to earn income or profit over time.

Partial Equity Method

An accounting method used when an investing company has significant influence over, but not full control of, another company, requiring the investor to record its share of profits.

Equity Method

The Equity Method is an accounting technique used to record investments in other companies, recognizing the income earned from the investment proportional to ownership.