Author Question: The following is an example of adverse selection a. A majority of those applying for well paid jobs ... (Read 35 times)

kaid0807 · **on:** Jul 1, 2018

The following is an example of adverse selection
a. A majority of those applying for well paid jobs are well qualified
b. More reckless drivers opt for cars with fewer safety devices
c. Individuals living in less secure neighborhoods want to buy less insurance
d. Individuals with a strong family history of heart diseases opt to buy more insurance

Question 2

A consumer values a car at 525,00 . and a producer values the same car at 485,000 . If sales tax is 8 and is levied on the seller, then the sellers bottom line price is
a. 527,000
b. 523,800
c. 525,000
d. 500,000