A teacher tells her students that she will give them a riddle ...

[Tazate]

A teacher tells her students that she will give them a riddle that each student has to solve separately and then announce his or her answer in the class. Those who get the correct answer will get a gift.
 
  Kate, a student in the class, decides to give the answer that most students give, although the answer she gets from solving the riddle is quite different. This is an example of ________. A) adverse selection
  B) moral hazard
  C) a pecuniary externality
  D) an information cascade

Question 2

Switzerland provides a counterexample to the claim
 
  A) nations are poor because they are subject to exploitation by nations with superior military power.
  B) the rule of law is necessary for economic growth.
  C) military power is the source of the wealth of a nation.
  D) central economic planning doesn't work.

[cassie_ragen]

Answer to Question 1

D

Answer to Question 2

C

[Tazate]

Correct answers!

[cassie_ragen]

Great! Please up vote