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a. What type of asymmetric information problem does Isaac face? Write a short explanation justifying your answer. b. What is the maximum interest rate Isaac

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a. What type of asymmetric information problem does Isaac face? Write a short explanation justifying your answer. b. What is the maximum interest rate Isaac can charge so that both types of farmers would want to borrow? c. Let it be Isaac's profit. Derive an expression for 301:), the expected value of Isaacs's profit from a loan, as a function of the interest rate when the interest rate is less than or equal to the value you identified in part b. (Remember: Over this range of the interest rate, Isaac cannot tell to which type of farmer he has given the loan!). (1. Explain what will happen if Isaac increases the interest rate above the interest rate you identified in b

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