The Adverse Selection Problem Is a Likely Explanation for the Fact

question 283

Multiple Choice

The adverse selection problem is a likely explanation for the fact that

• A)some parents use video cameras to monitor the nannies caring for their children.
• B)some corporate managers were recently sent to prison for enriching themselves at the expense of shareholders.
• C)people in average health may be discouraged from buying health insurance by the high price.
• D)gifts can be interpreted as signals.

---

Definitions:

Dependent

An individual, usually a child or spouse, who relies on another, often the taxpayer, for financial support and for whom exemptions may be claimed.

Support

Financial assistance provided for maintenance, which can include food, housing, clothing, education, and healthcare.

Standard Deduction

A fixed dollar amount that reduces the income you're taxed on, varying by filing status and adjusted annually for inflation, available to all taxpayers who do not itemize their deductions.

Head of Household

A filing status for individuals who are unmarried and pay more than half of the costs of keeping up a home for themselves and a qualifying individual.