26 Jul HOW MIGHT THE PROBLEM BE DEALT WITH?
In each of the following cases identify whether the problem is adverse selection or moral hazard a Show more In each of the following cases identify whether the problem is adverse selection or moral hazard and explain your answer. How might the problem be dealt with? a. Rick has gotten a large advance to write a textbook. With the money in hand he prefers spending his time sailing rather that sitting in his office working on th book. b. David is trying to get a large advance to write a textbook. He knows but publishers dont that he did poorly on the writing portion of his entrance exam for graduate school. c. Brenda is buying a life insurance policy. She knows that members of her family tend of die young. d. Maria who has a large life insurance policy spends her vacation pursuing her favourite hobbies: skydriving bungee jumping and bull-fighting. Show less
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