An auto-insurance company introduces an anti-theft device that ...

[rayancarla1]

An auto-insurance company introduces an anti-theft device that records how well the customer has secured his car. If the driver locks his car with the monitored lock every day, the rates go down. The company is trying to solve a __________problem
 a. Adverse selection
  b. Moral hazard
 c. Forced bankruptcy
  d. None of the above

Question 2

If a firm is earning negative accounting profits, it implies
 a. That the firm's economic profits are zero
  b. That the firm's economic profits are positive
  c. That the firm's economic profits are negative
  d. More information is needed to conclude about economic profits

[brittanywood]

Answer to Question 1

b

Answer to Question 2

c