Which of the following is NOT an example of moral hazard?
A. People take poor care of their health because they have health insurance.
B. People drive recklessly because they have medical insurance.
C. People don't lock their doors because they have theft insurance.
D. All of these are examples of moral hazard.
Answer: D
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Refer to Figure 13-1. Ceteris paribus, a decrease in personal income taxes would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
A maximum wage law, as opposed to a minimum wage law, would be considered a
A. price ceiling. B. price floor. C. tax on businesses. D. sales tax.
During a football game, it starts to rain and the temperature drops. The senior class, which runs the concession stand and is studying economics, raises the price of coffee from 50 cents to 75 cents a cup. They sell more than ever before. Which answer explains this?
A. The supply of coffee increased B. The demand curve for coffee was elastic C. The supply of coffee decreased D. The demand for coffee increased E. The demand curve for coffee was inelastic
The law of demand states that a lower price increases the amount of a commodity that people are willing to buy.
Answer the following statement true (T) or false (F)