FSU PUP 3002 Final Exam Study Guide
Questions and Answers
cradle-to-grave approach - ANSWER-Requires manufacturers to take back
electronic products at the end of their useful lives and repair, remanufacture, or
recycle them
principal-agent problem - ANSWER-a problem caused by an agent pursuing his own
interests rather than the interests of the principal who hired him
Moral Hazard - ANSWER-Arises when people behave recklessly because they know
they will be saved if things go wrong
Adverse Selection - ANSWER-A high-risk person benefits more from insurance, so is
more likely to purchase it.
Ex post control tactics - ANSWER-Wait for an agent to misbehave, then punish
ex ante control tactics - ANSWER-Agent does an action before the principle
incentivizes that action
Technical Uncertainty - ANSWER-the uncertainty the agency has in its estimate of
the policy consequences of a given choice
procedural uncertainty - ANSWER-the uncertainty about what type of choice the
agency is likely to make
weather - ANSWER-The condition of Earth's atmosphere at a particular time and
place.
climate - ANSWER-The average weather conditions in an area over a long period of
time
greenhouse effect - ANSWER-warming that results when solar radiation is trapped
by the atmosphere
Risk Management - ANSWER-a strategy to offset business risks
risk assessment - ANSWER-evaluation of the short-term and long-term risks
associated with a particular activity or hazard
climate change - ANSWER-a change in global or regional climate patterns, in
particular a change apparent from the mid to late 20th century onwards and
Questions and Answers
cradle-to-grave approach - ANSWER-Requires manufacturers to take back
electronic products at the end of their useful lives and repair, remanufacture, or
recycle them
principal-agent problem - ANSWER-a problem caused by an agent pursuing his own
interests rather than the interests of the principal who hired him
Moral Hazard - ANSWER-Arises when people behave recklessly because they know
they will be saved if things go wrong
Adverse Selection - ANSWER-A high-risk person benefits more from insurance, so is
more likely to purchase it.
Ex post control tactics - ANSWER-Wait for an agent to misbehave, then punish
ex ante control tactics - ANSWER-Agent does an action before the principle
incentivizes that action
Technical Uncertainty - ANSWER-the uncertainty the agency has in its estimate of
the policy consequences of a given choice
procedural uncertainty - ANSWER-the uncertainty about what type of choice the
agency is likely to make
weather - ANSWER-The condition of Earth's atmosphere at a particular time and
place.
climate - ANSWER-The average weather conditions in an area over a long period of
time
greenhouse effect - ANSWER-warming that results when solar radiation is trapped
by the atmosphere
Risk Management - ANSWER-a strategy to offset business risks
risk assessment - ANSWER-evaluation of the short-term and long-term risks
associated with a particular activity or hazard
climate change - ANSWER-a change in global or regional climate patterns, in
particular a change apparent from the mid to late 20th century onwards and
