Author Question: One difference between moral hazard and adverse selection is a. Moral hazard has to do with ... (Read 103 times)

mikaylakyoung · **on:** Jul 1, 2018

One difference between moral hazard and adverse selection is
a. Moral hazard has to do with unobservable characteristics of individuals
b. Adverse selection has to do with unobservable actions of individuals
c. Adverse selection is when individuals change their behaviors because of a contract
d. Adverse selection is when you choose the wrong answer on a test

Question 2

If the firm hires 5 workers, the average cost equals
a. 250
b. 50
c. 5
d. Need more information