Which of the following NOT true of adverse section? It would not exits in a world with perfect information. It arises because borrowers typically know more about themselves than lenders. It describes a lender's problem of distinguishing the good-risk applicants from the bad-risk applicants. It describes a lender's problem in monitoring borrower's used of funds. Which of the following is an example of adverse selection? A homeowner with a large fire insurance policy allows the wiring i8n her house to deteriorate. A woman with a large life insurance policy takes up sky diving. You brother in law borrows $20,000 from you to open a pizza parior, but spends it gambling at the racetrack instead. A man with a bad heart condition buys a large life insurance policy. When premium in the health insurance market increases, adverse selection problems worsen. adverse selection problems are mitigated. moral hazard problems worsen. moral hazard problems are mitigated