Match List - 1 with List - II.

List - 1

List - II

A.

Low quality of goods can drive high quality goods out of market

I.

Moral Hazard

B.

A party whose actions are unobserved can affect the probability or magnitude of a payment

II.

Ratchet effect

C.

Individuals tend to value an item more when they own it than when they do not

III.

Lemons Problem

D.

Preference of government is to make sustained expenditure

IV.

Endowment effect

Choose the correct answer from the options given below:

A - I, B - IV, C - II, D - III

A - I, B - III, C - IV, D - II

A - III, B - I, C - IV, D - II

A - III, B - II, C - IV, D - I

List - 1		List - II
A.	Low quality of goods can drive high quality goods out of market	I.	Moral Hazard
B.	A party whose actions are unobserved can affect the probability or magnitude of a payment	II.	Ratchet effect
C.	Individuals tend to value an item more when they own it than when they do not	III.	Lemons Problem
D.	Preference of government is to make sustained expenditure	IV.	Endowment effect