Which of the following describes a moral hazard problem? A) a ...

[meagbuch]

Which of the following describes a moral hazard problem?
 
  A) a process by which individuals have substantial resources devoted to the exchange process and need to make a profit or they will be adversely affected
  B) a process by which individual buyers or sellers with better information are more likely to participate in voluntary exchange
  C) a contractual problem that results because monopolies exist in all economies
  D) a post-contractual problem that may result because participants to the exchange process have information that allows them to act in an opportunistic manner

Question 2

The price system works in an economy on a day-to-day basis to match the desires of consumers with the output from producers.
 
  Indicate whether the statement is true or false

[hramirez205]

Answer to Question 1

D

Answer to Question 2

TRUE