Examine how the invention of the seat belt may have created a moral hazard problem
Please provide the best answer for the statement.
Moral hazard is a tendency for an individual to alter her or his behavior when the situation changes. While many government officials believed the seat belt would save lives, it also caused individuals to drive more carelessly. The protection a seat belt offers created a moral hazard problem with individuals altering driving behavior.
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The adverse selection process is prevalent in the used car market because
a. only poorer people are likely to purchase used cars. b. sellers know more about the vehicles being sold than do potential buyers. c. the price of the car sends a signal about its quality. d. so many consumers are adverse to buying used cars.
Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives:
a. subsidies for education b. research on Alzheimer's c. increased border security If voters prefer a to b and b to c, then if preferences are transitive A) they should prefer c to a. B) they should prefer a to c. C) they should be indifferent between a and c. D) it is not always possible to rank voters' preferences between a and c.
Refer to the above figure. If the government imposes a price ceiling of $60
A) the quantity traded will be 150, and the price will be $40. B) the quantity traded will be 100, and the price will be $60. C) the quantity traded will be 200, and the price will be $60. D) the quantity traded will be 150, and the price will be $60.
Which of the following accounts for the largest percentage of spending by households in the United States?
a. durable goods b. nondurable goods c. services d. insurance payments e. underground activities (e.g., illegal activities)