The principal-agent problem could be defined by saying that it is an agent who benefits from the effort of others without having even participated in the joint effort. It is a concept that is to be linked more broadly to the problems of information asymmetry.
<span>The term moral hazard refers to a type of market failure where the existence of insurance against a certain risk increases the likelihood of the occurrence of the event causing the risk.</span>
<u>The right answer is:</u>
Principal-agent problem matches with 2
Asymmetric information matches with 3
Adverse selection matches with 4
Moral hazard matches with 1
The answer is: B) silkworms.
“While sitting in her garden she deduced the secret of silk by watching the silkworms. She developed the process to remove the thread from the cocoon and set up silk cultivation farms and the weaving of the new cloth.” (Source: http://4kyws.ua.edu/SI_LING_CHI.html)
I would say that your correct answer is B
Metabolic rate and production of by products of the ice fish increases with temperature
