Which of the Following Is False

question 130

Multiple Choice

Which of the following is false?

• A)Product liability laws can make it unprofitable to sell shoddy merchandise, providing a substantial incentive to provide safe products independent of government regulations.
• B)Asymmetric information exists when the available information is initially distributed in favor of one party to a transaction relative to another.
• C)In adverse selection situations, it is rational for a seller with more information about a product to provide a truthful and complete disclosure and make that fact known to a potential buyer.
• D)Moral hazard arises from the fact that it is costly for an insurer to monitor the behaviors of the insured party.
• E)Warranty agreements that limit the responsibility of the insurer in certain situations are one method of controlling moral hazard problems.

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Definitions:

Saturated Fat

A type of dietary fat found in animal products and certain oils that is solid at room temperature and associated with increased cardiovascular risk.

Elevated Total Cholesterol

Higher than normal levels of cholesterol in the blood, increasing the risk of heart disease and stroke.

Diet

The combination of foods and beverages a person consumes, influencing health and nutritional status.

Body Fat

The portion of an individual's body mass composed of fat tissues, critical for energy storage, insulation, and protection of vital organs.