In the relationship between a worker and her employer,which of the following are potential problems
A)Asymmetric information is a potential problem, but moral hazard is not a potential problem.
B)Asymmetric information is a potential problem, but adverse selection is not a potential problem.
C)Moral hazard is a potential problem, but asymmetric information is not a potential problem.
D)Adverse selection is a potential problem, but asymmetric information is not a potential problem.

Question

Quizplus · Accepted Answer

Asymmetric information is a potential problem in the worker-employer relationship, as the employer may not have perfect information about the worker's skills or productivity. Adverse selection, where one party has more information than the other and uses it to their advantage, is also a potential problem. Moral hazard, where one party takes risks or engages in harmful behavior because they are not fully responsible for the consequences, is less likely to be a problem in this relationship.

In the Relationship Between a Worker and Her Employer,which of the Following