In the market for insurance, the moral hazard problem leads:
a. those most likely to collect on insurance to buy it
b. those who buy insurance to take fewer precautions to avoid the insured risk.
c. those with less insurance to take on more risk.
d. to none of the above.
b
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If MRP > P, a firm should use less of that input.
Answer the following statement true (T) or false (F)
Production indifference curves show the combination of inputs that produce a given output.
Answer the following statement true (T) or false (F)
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Deadweight loss refers to a loss in revenue resulting from producers having to reduce their selling price to remain competitive
Indicate whether the statement is true or false