Adverse selection and moral hazard are not problems associated with market transaction.

Question

Quizplus · Accepted Answer

Adverse selection and moral hazard are both problems that can occur in market transactions. Adverse selection refers to the situation where one party has more information than the other and uses that information to their advantage, while moral hazard occurs when one party takes risks because they are protected from the consequences. Both of these can create inefficiencies in markets and lead to suboptimal outcomes.

Adverse Selection and Moral Hazard Are Not Problems Associated with Market