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A Teacher Tells Her Students That She Will Give Them

Question 85

Multiple Choice

A teacher tells her students that she will give them a riddle that each student has to solve separately.Each student has to 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

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