Which of the Following Is Not Correct

question 186

Multiple Choice

Which of the following is not correct?

• A)An example of adverse selection is man who tries to sell his used car without disclosing that it needs a new transmission.
• B)The "invisible hand" of a free market will always fix the problems of adverse selection and moral hazard.
• C)An employer may try to prevent a moral hazard problem by paying her workers an efficiency wage.
• D)One interpretation of gift giving is that it reflects asymmetric information and signaling.

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Definitions:

Individual Drinks

Beverages prepared and served to cater to the personal taste or preference of an individual.

Observation

The active acquisition of information from a primary source, using either the senses directly or tools as an extension of the senses, in a methodical manner.

Major Questions

Major questions are significant or fundamental inquiries aimed at understanding core aspects of a subject or issue.

Observe

To attentively watch or monitor something or someone using the senses, especially sight.