Question

question 8
buyers will opt out of markets in which
there are only foreign sellers.
there are significant negative externalities.
there is inadequate information about sellers and their products.
standardized products are being produced.
question 9
as it applies to insurance, the moral hazard problem is the tendency for
those most likely to collect on insurance to buy it.
sellers to restrict output and charge high prices.
sellers to price discriminate.
those who buy insurance to take less precaution in avoiding the insured risk.

Explanation:

• Question 8: In markets with inadequate information about sellers and their products, buyers face uncertainty. This can lead to adverse selection (a key concept in economics). For example, in the used - car market (the "lemons" problem), if buyers can't distinguish good and bad cars (inadequate information), they may opt out as they are reluctant to pay a fair price for a potentially bad product.
• Question 9: The moral hazard problem in insurance. When people buy insurance, if their behavior changes (they take less precaution) because they know the insurance will cover losses (asymmetric information after the insurance contract), it is a moral hazard. For instance, a person with fire insurance may be less careful with fire - safety measures.

Answer:

• Question 8: there is inadequate information about sellers and their products.
• Question 9: those who buy insurance to take less precaution in avoiding the insured risk.