Which of the following best illustrates the problem of moral hazard?
A) a professional baseball team that consistently drafts poor players
B) an individual that is hiding a pre-existing condition from a health insurance provider
C) an increase in the level of one's income will lead to a decrease in demand for inferior goods
D) an economic agent that engages in risky behavior once a loan contract is signed
D
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An increase in the effective tax rate on capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if taxes are fully deductible from income; otherwise, shift up and to the right.
The "most favored nation principle" means:
a. that member countries can enter into exclusive favorable agreements with some countries. b. that member countries are barred from forming agreements outside their geographic vicinity. c. that member countries must apply the same low tariffs to all WTO member countries. d. that member countries must apply differential tariffs on imports from non-WTO countries.
Simple regression is an analysis of correlation between two variables.?
Answer the following statement true (T) or false (F)
The price rationing mechanism of a freely functioning market leads to the most efficient use of resources because
A) all gains from mutually beneficial trade are captured. B) the government regulates the market. C) of the rise of the legislative apparatus that supports trade. D) the Supreme Court determines market activities.