CASE: You Have Had an Older Computer for a Long

question 477

Multiple Choice

CASE: You have had an older computer for a long time, but you have just invested in a brand-new one, which comes with a new mouse with some features you've never had before.

• A) Tilt wheel
• B) Rotate wheel
• C) Right-drag
• D) Press wheel

---

Definitions:

Hidden Actions

Pertains to situations in principal-agent relationships where agents' specific actions are not observable by the principal, leading to a moral hazard.

Hidden Information

Information that is not known to one party in a transaction, which can lead to an imbalance of power or adverse selection.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the consequences of those risks, often arising in insurance and finance contexts.

Government Bailouts

Financial support provided by the government to prevent the failure of a struggling company or industry, often to stabilize the economy and preserve jobs.