The Tendency for People to Enter into Agreements in Which

question 173

Multiple Choice

The tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party is known as

• A) adverse selection
• B) moral hazard.
• C) the market for oranges.
• D) a signal.

---

Definitions:

Telus Mobility

A Canadian wireless network operator and a division of Telus Communications offering mobile voice, text, and data services.

Free Market

An economic system in which prices are determined by unrestricted competition between privately owned businesses.

Economic Growth

The increase in the inflation-adjusted market value of the goods and services produced by an economy over time, often measured as the percentage increase in real gross domestic product (GDP).

Neoclassical School

An economic theory that emphasizes the role of supply and demand in determining the price and quantity of goods and services offered in a market, focusing on rational behavior and equilibrium.