Quiz: Exam 2 intro to mics 5) Question 35 2.5 pts Which of the following relatio
ID: 1154057 • Letter: Q
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Quiz: Exam 2 intro to mics 5) Question 35 2.5 pts Which of the following relationships involves asymmetric information? Patients can look up information regarding certain prescription drugs giving them the same information as their doctors. Consumer Reports allows customers of DVD players to know as much about the quality of various players as the store salesperson. O Car Fax allows car buyers to obtain used-vehicle histories providing them with the same information as the dealership salesperson. O The batter in a baseball game must guess whether the pitcher is going to throw a fastball, curveball, or change-up. D Question 36 2.5 pts Moral hazard occurs when O an employer closely monitors an employee. O two people consider a trade with each other and one person has relevant information about some aspect of the product's quality that the other person lacks D an employee lacks an incentive to promote the best interests of the employer, and the employer cannot observe the actions of the employee. O an employee closely monitors the actions of her employerExplanation / Answer
Answer 35 : It shows the relationship of asymmetric information. The batter in a baseball game must guess whether is pitcher is going to throw a fastball or paceup. It shows that asymmetric Information can lead to less information available with them. Option D is correct.
Answer 36 : Option C is correct.Moral hazards is a situation in which there is a hidden action of an employee related to the employer. It means that when an employee lacks of incentive to promote the best interest of the employer cannot observe the action of the employee.It shows that employee has been behave in Risker way as more risk has been beared by the employer.
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