The Problem Created by Asymmetric Information Before the Transaction Occurs

question 118

Multiple Choice

The problem created by asymmetric information before the transaction occurs is called ________,while the problem created after the transaction occurs is called ________.

• A)adverse selection;moral hazard
• B)moral hazard;adverse selection
• C)costly state verification;free-riding
• D)free-riding;costly state verification

---

Definitions:

Out-Of-Wedlock Birth

The birth of a child to parents who are not legally married to each other at the time of the child's birth.

Kenneth Clark

An African American psychologist whose research on the effects of segregation on black children was instrumental in the Brown vs. Board of Education Supreme Court case.

Inner-City

A term often used to refer to areas in the central part of a major city, known for higher population density, economic challenges, and sometimes cultural vibrancy.

Mississippi Appendectomy

A term for involuntary sterilization procedures performed on poor, African American women in the United States, particularly in the South, without their informed consent.