_____ Occur(s) When an Agent Tries to Exploit Information Advantage

question 64

Multiple Choice

_____ occur(s) when an agent tries to exploit information advantage in a dishonest way.

• A) Adverse selection
• B) Moral hazard
• C) Mutually beneficial trades
• D) Information asymmetry

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Definitions:

Fracking

A technique for extracting oil and natural gas from rock by injecting high-pressure fluid to create fractures, allowing resources to be more easily harvested.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers matches the quantity supplied by producers, resulting in market balance.

Nutella

Nutella is a brand of sweetened hazelnut cocoa spread manufactured by the Italian company Ferrero, widely popular worldwide.

Hazelnuts

Edible nuts produced by trees of the genus Corylus, known for their use in sweets and cooking.