Refer to the scenario above. Which of the following problems ...

[cmoore54]

Refer to the scenario above. Which of the following problems arises in this scenario?
 
  A) Low transaction costs
  B) The free-rider problem
  C) Moral hazard
  D) A negative externality

Question 2

The price paid to purchase land
 
  A) has no relation to cost because it did not cost anything to produce the land.
  B) rarely has any relation to cost because it has usually been determined by competitive bidding.
  C) usually depends on the cost to the seller of letting the purchaser have the land.
  D) would more accurately reflect the social value of the land if the price were zero.

[iceage]

Answer to Question 1

D

Answer to Question 2

C

[cmoore54]

Excellent

[tranoy]

TYSM