The instructor of this course requires that 4-5 students form a project team to conducta research on an assigned theme.

Question 1: The instructor of this course requires that 4-5 students form a project team to conducta research on an assigned theme. The instructor stipulates that every member of the team shallget a same grade. Explain the nature of group moral hazard problem in this context and explainhow the team as a whole will or will not do due diligence and earns a just grade. In your answeryou must at least include the following points.• Explain how a moral hazard known as a free-rider problem occurs in this situation. Describethe nature of a free-rider problem that can occur in this team project context.• What do you do if teams mate free rides?• Is reporting a free-rider to the instructor credible or effective?• Can there be a different sort of moral hazard that may arise in this setting?• Can there be a moral hazard on the part of the instructor?• Will the free rider problem be resolved if the project team was self-organized without theinstructor whose function is to evaluate the research outcome and assign the grade for theentire team?Question 2: An economics student has once proposed the following traffic control that may relievepolice of traffic ticketing duties. Each car will be equipped with a monitor-cum-report device thatthe driver can use to report directory to a traffic control center. Every time a driver encounters atraffic offender, he/she presses the button to report the offending driver. This will register who(or which car) reported whom (or which car). Such mutual monitoring and reporting, as theproposing economics student says, should reduce significantly the need for police officers to expend time and effort on traffic issues, so that they can devote more attention to more serious or urgentissues. Does this scheme work or does not work? Is there a way to make it work? Justify your answer cogently.• Word-process your narrative.•Your narrative must be contained within 1.5” margins all around. The boxed frame of this quiz has the 1.5” margins all around.• Use 1.50-line spacing and font-size 11.• No bold letters, please.• There will be a penalty for writing beyond the set margins.• You will be scored for the cogency of your narrative, not the length per se.