For Third- Party Certification to Overcome the Problem Of_______

question 62

Multiple Choice

For third- party certification to overcome the problem of_______ , consumers must believe that it is_______ .

• A)adverse selection; biased
• B)adverse selection; unbiased
• C)moral hazard; unbiased
• D)moral hazard; biased

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Definitions:

Perceived Personal Deprivation

An individual's feeling or belief that they are lacking in some respect compared to others.

Fundamental Attribution Error

The Fundamental Attribution Error is a cognitive bias where people tend to overemphasize personality-based explanations for behaviors observed in others while underestimating situational explanations.

Relative Deprivation

The perception that one is worse off relative to those with whom one compares oneself.

J-curve

An economic theory describing a country's trade balance that initially worsens following a depreciation of its currency but then improves beyond its original level.