1)Should the government be more active, providing assistance to achieve a common good for all citizens, or, should the government be more limited, involved only to the extent that it protects individual rights and liberties? Explain your answer.

2)When a home in McAllen went up for sale, the person interested in buying a home wanted to have the house inspected. The person selling the home encouraged the buyer to inspect the house before the sale is final. Which statement is true?

a) The buyer is signaling.

b) The seller is screening.

c) The buyer is trying to solve the problem of adverse selection.

d) None of the above.

1)It is the responsibility of the government to protect individual rights and liberties, but that does not mean that the government should maintain distance from providing assistance to achieve a common good for all citizens. Protecting individual rights and liberties is important, but at the same time, the 'well-being' of all citizens is also important for the government. The government must ensure the quality of life it is providing to its citizens and must be ready to take appropriate steps when needed. Thus, the government must intervene to achieve a common good for all citizens.

2)When a home in McAllen went up for sale, the person interested in buying a home wanted to have the house inspected. The person selling the home encouraged the buyer to inspect the house before the sale is final. Which statement is true? c) The buyer is trying to solve the problem of adverse selection.

Adverse selection occurs when there is asymmetric information between two parties, such as the buyer and seller in this case. The seller wants to make sure the buyer has the correct information before purchasing the house so that there won't be a problem with the sale going forward.