In each of the following cases, identify whether the problem is adverse selection or moral hazard, and explain your answer. How might the problem be dealt with?

a. Rick has gotten a large advance to write a textbook. With the money in hand, he prefers spending his time sailing rather that sitting in his office working on th book.

b. David is trying to get a large advance to write a textbook. He knows, but publishers don't, that he did poorly on the writing portion of his entrance exam for graduate school.

c. Brenda is buying a life insurance policy. She knows that members of her family tend of die young.

d. Maria, who has a large life insurance policy, spends her vacation pursuing her favourite hobbies: skydriving, bungee jumping, and bull-fighting.