QUESTION 8 A Training Program Institute decides to offer "Fail Safe" to its students. Fail Safe is an insurance program where students are able to pay $250 on top of their fees to ensure that if they fail a subject they are able to obtain a passing grade. Select the item from the list provided to make the following statements true. John says that the students who are most likely to take out the 1. Adverse selection insurance are those who are most likely to fail, which is an 2. 20% example of 3. Asymmetric information 4. Marginal benefit The Institute discovers that after implementing the insurance policy, an increased number of students are failing subjects. 5. Principal-agent problem This is an example of 6. Expected value 7. 80% If the cost of one of Jessica's subjects is $1250, what must 8. Costly to fake principle be the minimum percentage likelihood that Jessica believes 9. More time looking she will fail given that she is risk averse to taking out the 10. Moral hazard insurance? 11. Marginal cost 12. Less time looking