Which of the following actions best illustrates moral hazard?
a. A person adds risky stock to his portfolio.
b. A person who has narrowly avoided many accidents applies for automobile insurance.
c. A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.
d. A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.
d
You might also like to view...
International equilibrium occurs if the quantity of imports demanded by one country is equal to the quantity of exports supplied by the other country
a. True b. False Indicate whether the statement is true or false
What percentage of federal spending was financed by borrowing during 2009-2010?
a. approximately 10 percent b. approximately 20 percent c. approximately 40 percent d. more than 50 percent
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point A necessarily represents
A. only hybrid cars being produced. B. an unattainable production point. C. what society wants. D. the economy's optimal production point.
An In the News article titled "Selling "Pure Water": A $Billion Scam?" refers to the use of advertising. Successful advertising can do all of the following except
A. Differentiate products. B. Create brand loyalty. C. Maximize efficiency. D. Decrease the price elasticity of demand for the product.