Answer the Following:

1. If I engage in consuming scotch, then my private costs and benefits__________

the costs and benefits of those around me including myself..

A. are the same as

B. are likely different than

C. add to a negative number and are thus irrational.

D. include more than

2. Suppose you know a person who is beginning the process of looking for a suitable mate or spouse. You point out to that person that while

"love is blind" and one "can find love anywhere" they should focus their search for potential mates in areas (virtual or geographic) where they are likely to see people with belief systems like their own. That is you want to encourage them to target their search for a mate. You explain that this may help reduce some of the uncertainties (information problems) they face. You are trying to prevent that person from being victimized by____________

in their search.

A. adverse selection.

B. any one of a large number of issues, the primary one is whether or not the toilet paper hangs over or under the roll in the facilities

C. moral hazard

D. agency problems

3. In a world where transactions occur and one party has better information about the nature of the transaction and the elements of the transaction we call this a situation of_______

A. incomplete information.

B. something that our parents warned us of when we were younger.

C. asymmetric information

D. erroneous information

4. Please associate the Terms with the best match definition from among the second items listed.

Terms

Principal Agent Problem

Adverse Selection

Incomplete Information

Externality

Second items list Definitions

A. Gives rise to information costs.

B. Another Name for Moral Hazard

C. Concern before transaction.

D. A cost or benefit to someone not directly involved in a transaction/activity.

5. In a publicly traded corporation we see various groups involved in the decisions relating to the decision making of a firm. The _______ are the owners in this situation and the________

has a legal, fiduciary responsibility to advance the interest first group.

A. ESG division / stock holder(s)

B. firm managers / stock holders

C. Board of directors / stock holders

D. stock holders / firm managers

6. True or False. By engaging in ESG based activities, firms are acting against the interest of their stockholders.

A. True

B. False