When Executives Presell Products at Year-End to Trigger Their Annual

question 45

Multiple Choice

When executives presell products at year-end to trigger their annual bonuses even though the deep discounts that they must offer will threaten the price stability of their products for the upcoming year,this is an example of

• A) Moral hazard problem
• B) Adverse selection
• C) Self-concept
• D) Concern for quality

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Definitions:

Trade Benefit

The advantage gained by countries, companies, or individuals from engaging in international trade, including increased economic output, efficiency, and consumer choice.

Soybeans

A type of edible legume that is widely cultivated for its nutrient-rich seeds and oil.

Alfalfa

A perennial flowering plant widely cultivated as fodder for livestock due to its high protein content and essential nutrients.

Opportunity Cost

The cost of foregone alternatives; the value of the best alternative that is given up as a result of making a decision.