John wants to buy a new television set. He can either buy it in ...

[lbcchick]

John wants to buy a new television set. He can either buy it in the US and pay 1200 or buy it in Canada and pay CAD1300 . At the exchange rate of 1CA=US0.92, ignoring any other costs, he would
 a. Prefer buying in the US
 b. Prefer buying in Canada
 c. Be indifferent about where he buys his television
  d. None of the above

Question 2

To decrease anxiety in its most accomplished teachers, a school decides to offer them tenure, to help them concentrate on teaching better. Instead it notices that even the best of the teachers started to get sloppy with their work. The school did not foresee
 a. Adverse selection
  b. Moral hazard
 c. All of the above
 d. None of the above

[aliotak]

Answer to Question 1

b

Answer to Question 2

b

[lbcchick]

Excellent

[Laurenleakan]

TYSM