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Asymmetric Information

Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?

Asymmetric Information, Economics Mcqs /
Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?

A. They pay employees with delayed compensation such as a year-end bonus
B. They buy life insurance on their workers
C. They pay above equilibrium wages
D. They put hidden video cameras in the workplace

Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ? Read More »

Asymmetric Information, Economics Mcqs

Which of the following is an example of a signal that is used to reveal private information ?

Asymmetric Information, Economics Mcqs /
Which of the following is an example of a signal that is used to reveal private information ?

A. Enzo carefully chooses a special gift for Josephine
B. Josephine earns her MBA from the Harvard Business School
C. Lexus advertises its cars during the football World Cup Final.
D. All of these answers are correct

Which of the following is an example of a signal that is used to reveal private information ? Read More »

Asymmetric Information, Economics Mcqs

Jamil’s car is in need of repair, so John decides to sell it avoid the repair bill. Unaware of the problem, Shahab buys the car. This is an example of ?

Asymmetric Information, Economics Mcqs /
Jamil’s car is in need of repair, so John decides to sell it avoid the repair bill. Unaware of the problem, Shahab buys the car. This is an example of ?

A. hidden actions
B. adverse selection
C. moral hazard
D. adverse selection

Jamil’s car is in need of repair, so John decides to sell it avoid the repair bill. Unaware of the problem, Shahab buys the car. This is an example of ? Read More »

Asymmetric Information, Economics Mcqs