Which of the Following Can Create Inefficiency and Deadweight Loss

question 69

Multiple Choice

Which of the following can create inefficiency and deadweight loss?

• A) Moral hazard can create inefficiency and deadweight loss but adverse selection cannot.
• B) Adverse selection can create inefficiency and deadweight loss but moral hazard cannot.
• C) Both moral hazard and adverse selection can create inefficiency and deadweight loss .
• D) Neither moral hazard nor adverse selection can create inefficiency and deadweight loss .
• E) None of the above answers are correct because whether inefficiency and deadweight loss are created depends on whether the moral hazard and adverse selection affect demanders or suppliers.

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Definitions:

Presentation Format

A method or style in which information is organized and presented, often used in business, academic, or professional settings to effectively communicate ideas.

Customer Organizational Structure

A framework that defines how customers interact with and are managed by a business, often focusing on roles and responsibilities related to customer service and relationships.

Swiss-Based

Refers to companies, organizations, or entities that are located in Switzerland, often noted for their stability, quality, and precision.

Industrial Equipment

Machinery and tools designed for use in industrial settings, such as manufacturing, construction, and material handling operations.