Which of the Following Statements Is True

question 30

Multiple Choice

Which of the following statements is true?

• A)Dietary supplements can be recalled if the products contain kava,lysine,or glucosamine.
• B)Dietary supplements can include substances that are spread on the skin or injected into the body.
• C)Consumers can report negative health reports that may have resulted from their use of dietary supplements to the FDA.
• D)Medicinal herbs must undergo testing for safety and effectiveness by the FDA before they can be marketed in the United States.

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Definitions:

Adverse Selection

Adverse selection is a situation in which an asymmetry of information between buyers and sellers results in the failure to facilitate optimal market outcomes, often seen in insurance markets where those most likely to claim insurance are also the most likely to purchase it.

Moral Hazard

The tendency of a person or entity to take risks because the negative consequences of the risk will be borne by another party.

Unobservable Actions

Actions taken by individuals or entities that cannot be seen or monitored by others, often discussed in the context of economics or game theory.

Moral Hazard

A situation where one party is more likely to take risks because the negative consequences of the risk will be borne by another party.