In which of the following cases is there an adverse selection problem? A motor insurance market, in which the insurers do not know how carefully the insured people drive A health insurance market, in which the insurers do not know whether or not the applicants for insurance are habitual smokers C Employees may take less care of office technology like laptops or even incentives like company cars because their employer will pay for them if dama A firm that employn home-workers, but cannot observe how hard they are working All the above are cases of moral hazard problem

In which of the following cases is there an adverse selection problem? A motor insurance market, in which the insurers do not know how carefully the insured people drive A health insurance market, in which the insurers do not know whether or not the applicants for insurance are habitual smokers C Employees may take less care of office technology like laptops or even incentives like company cars because their employer will pay for them if dama A firm that employn home-workers, but cannot observe how hard they are working All the above are cases of moral hazard problem

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter8: Market Failure

Section: Chapter Questions

Problem 10P

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