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Another way to think about the problem of adverse selection is the general problem of non-random selection and how it can make people come to

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Another way to think about the problem of adverse selection is the general problem of non-random selection and how it can make people come to the wrong conclusions. In the case of insurance companies, adverse selection causes them to set the "wrong prices." But this is a general phenomenon. Consider the following scenarios and explain how non-random selection may affect lead to the wrong conclusions: a. A TV report tells us the following: \"A recent study revealed that people who eat broccoli at least twice a week live an average of 6 years longer than people who do not.\" The reporter says "there broccoli increases life expectancy.\" b. Children who attend private schools generally perform better than children from public schools on standardized tests. Thus, observers often conclude that private schools are better than public schools

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