Which firm is not dealing with adverse selection
A)a manufacturer requires a 90 day probationary period for new employees
B)a temporary clerical agency requires a typing test
C)a manufacturer contracts with suppliers regardless of ISO 9000 status
D)Smokers get the worse life insurance rates as non-smokers

Question

​Which firm is not dealing with adverse selection
A)​a manufacturer requires a 90 day probationary period for new employees
B)a temporary clerical agency requires a typing test
C)a manufacturer contracts with suppliers regardless of ISO 9000 status
D)​Smokers get the worse life insurance rates as non-smokers

Quizplus · Accepted Answer

The manufacturer contracting with suppliers regardless of ISO 9000 status is not dealing with adverse selection because they are not making a decision based on imperfect information or asymmetry of information. ISO 9000 certification is a quality management system certification which may or may not be important to the manufacturer depending on their specific needs and priorities.

​Which Firm Is Not Dealing with Adverse Selection

Which Firm Is Not Dealing with Adverse Selection