Suppose the workers on a farm are equally productive but they may decide not to work as hard because they are not monitored or observed. This is a situation involving O. adverse selection. O. a hold-up problem. O. a cooperation problem. O. moral hazard.
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- It is the morning commute in Congestington, DC. Of 100 drivers, eachdriver is deciding whether to take the toll road or take the back roads. Thetoll for the toll road is $10, while the back roads are free. In deciding ona route, each driver cares only about income, denoted y, and his traveltime, denoted t. If a driver’s final income is y and his travel time is t, thenhis payoff is assumed to be y - t (where we have made the dollar value ofone unit of travel time equal to 1). A driver’s income at the start of the dayis $1,000. If m drivers are on the toll road, the travel time for a driver onthe toll road is assumed to be m (in dollars). In contrast, if m drivers takethe back roads, the travel time for those on the back roads is 2m (again,in dollars). Drivers make simultaneous decisions as to whether to take thetoll road or the back roads.a. Derive each player’s payoff function (i.e., the expression that gives usa player’s payoff as a function of her strategy profile.)b. Find a Nash…Why can't safe drivers get lower rates by telling insurance companies that they are less likely to have an accident? Select one: O a. because insurance companies don't want to cut rates for anyone O b. because unsafe drivers would make the same claim O c. because no one can really know if he or she is a safe driver O d. because accidents happen to everyoneJohn is a 55-year-old male smoker, about 50 pounds overweight, who has high blood sugar and drinks to excess. Because of adverse selection in health insurance, Select one: O a. when John gets health insurance, he will be less likely to take care of himself. O b. if John doesn't have health insurance already, he will not be able to get it. O c. when John gets health insurance, he will be more likely to take care of himself. O d. John is more likely to buy health insurance than the average person since premiums are based on the average risk. O e. John is less likely to buy health insurance than the average personsince premiums are based on the average risk.
- Actual authority is the authoritya partner appears to have to third parties external to the partnership.O. TrueO. FalseWhich of the follow describes the basic problem of Adverse Selection? O It occurs "before the transaction," and is due to a change in behavior of the agent. O It occurs "after the transaction." and is due to inherent unchanging characteristics of the agent. It occurs "after the transaction," and is due to a change in behavior of the agent. It occurs "before the transaction," and is due to inherent unchanging characteristics of the agent.1) John is operating an internation business in the United Stateds of American and is focused on the limitation or short-term impact of an issue. It can be said that John has a ............. 2) The grestest good for the greatest number of persons is known as the ............... approach. 3) this theorgy states that a country's wealth was deternmined by the amount of its gold and silver holding. It is ...........?
- The growth trend in the graph shown is depicted by: Output A Multiple Choice B TimeDetermine whether the results below appear to have statistical significance, and also determine whether the results have practical significance. In a study of a weight loss program, 6 subjects lost an average of 42 lbs. It is found that there is about a 37% chance of getting such results with a diet that has no effect. ~ Does the weight loss program have statistical significance? O A. No, the program is not statistically significant because the results are unlikely to occur by chance. O B. No, the program is not statistically significant because the results are likely to occur by chance. O C. Yes, the program is statistically significant because the results are unlikely to occur by chance. O D. Yes, the program is statistically significant because the results are likely to occur by chance. Does the weight loss program have practical significance? O A. No, the program is not practically significant because the results are likely to occur even if the weight loss program has no effect. O…Suppose that the University of Alabama and Clemson are making spending decisions for theupcoming year. Assume that Alabama is currently spending $15 million on their recruiting andfacilities, and Clemson is spending $10 million. Each team has an additional $5 million to spendor keep as profits. If they both choose to not spend the additional $5 million then Alabama hasa 60% chance of getting the highest quality quarterback recruit to commit to them (getting thecommitment of the player is the goal). However, if they both choose to spend the additional $5million then there is a 57% chance that Alabama gets the high quality quarterback to commit. IfAlabama spends the additional $5 million but Clemson doesn’t then there is a 67% chanceAlabama gets the recruit. However, if Alabama does NOT spend the additional $5million butClemson does then there is a 50% change either team gets the recruit’s commitment. Setup thepayoff matrix and label the players, their strategies, and their payoffs, and…
- Over time, a real depreciation in the value of a nation's currency should result in Select one: O a. exports rising and imports falling. O b. exports falling and imports rising. O c. both imports and exports falling. O d. both imports and exports rising.An example of adverse selection is the ability of the insurance company to detect the riskiness of people. This results in some healthy people being unable to get insurance at a price they are willing to pay. O a. False O b. True aIf people generally believe that "you get what you pay for," it is reasonable for them to: Multiple Choice O O make every effort to get complete information about a product before making a purchase to make sure that the purchase is opti assume that an expensive item is of higher quality, creating the possibility of an upward-sloping demand curve. assume that a cheaper brand is always a better deal than expensive brands. assume that an expensive item is of higher quality, which eliminates the possibility of an upward-sloping demand curve.
