Steve Is Planning to Sell His Home

question 217

Multiple Choice

Steve is planning to sell his home.In preparation for the sale,he paints all of the ceilings in his house to cover up water stains from his leaking roof so that potential buyers will be unaware of this problem.This is an example of

• A) moral hazard.
• B) screening.
• C) adverse selection.
• D) the principal-agent problem.

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