Suppose Sally buys a Volvo because they are safe and, as a ...

[nenivikky]

Suppose Sally buys a Volvo because they are safe and, as a result, drives faster and pays less attention to other cars on the road. This is an example of
 a. the winner's curse
  b. a positive externality
  c. irrational behavior
  d. moral hazard
  e. adverse selection

Question 2

Which of the following statements best serves as a summary of the other statements?
 a. Low income can mean poor nutrition during the formative years, which can retard mental and physical development
  b. Low income and low productivity may reinforce each other in a cycle of poverty
  c. Low productivity obviously results in low income
  d. Low income means less saving and less saving means less investment in human and physical capital
  e. Poverty can result in less education, less capital formation, a poor diet, and little health care

[Bison]

Answer to Question 1

D

Answer to Question 2

B

[nenivikky]

Excellent

[Alyson.hiatt@yahoo.com]

TYSM