What Phrase Describes Inferior Management Decision Making Based on Information

question 40

Multiple Choice

What phrase describes inferior management decision making based on information asymmetries?

• A) moral hazard
• B) adverse selection
• C) rationality
• D) blindness in truth

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Definitions:

Adam Smith

An 18th-century Scottish economist and philosopher best known for his theories on free market economies, depicted in "The Wealth of Nations."

Profit

The financial gain that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Mechanistic Organization

A highly structured, rigid, and bureaucratic form of organization based on centralized authority and a hierarchical line of command.

Leadership Role

A position of influence and responsibility where an individual guides and directs a group towards achieving a common goal.