Which of the Following Is False

question 45

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 in part from the fact that it is costly for an insurer to monitor the behaviors of the insured party.

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Definitions:

Anthropomorphism

The tendency to attribute human characteristics, such as motives, to other animal species.

Objectivity

The principle of being unbiased and impartial, ensuring personal feelings or opinions do not affect the representation of facts.

Dilution

A process of decreasing the concentration of a solute in solution, typically by adding more solvent.

Increased Vigilance

The heightened state of watchfulness and alertness to potential threats or dangers.