Moral hazard occurs when:
a. Individuals and institutions do not bear the full cost of their own mistakes.
b.Individuals and institutions make immoral decisions based on greed.
c. General social decay leads to unethical business decisions.
d. Warning lights for potential economic hazards are ignored.
e. All of the above are examples of moral hazard.
.A
You might also like to view...
If aggregate planned expenditure exceeds real GDP, then
A) unplanned inventory changes are positive. B) real GDP will decrease. C) aggregate planned expenditure must decrease to restore the equilibrium. D) planned inventory changes must be negative. E) unplanned inventory changes are negative.
As women's wages have risen relative to men's wages, the opportunity cost to women of doing housework has ________ than has the opportunity cost to men
A) increased more B) decreased less C) increased less D) decreased more
Personnel economics is
A) the study of how workers are affected by tax law changes. B) the application of economic analysis to the hiring decision. C) the application of economic analyses to human resource issues. D) the study of the factors that determine wage rates.
The free rider problem occurs because:
a. it is easy to exclude others from consuming a good. b. consumption is rivalrous, so the consumption of a product by one individual diminishes the amount available for others. c. exclusion is costly or impossible, so a consumer or producer can use a good without having to pay for it. d. external costs are imposed on others not directly involved in the transaction. e. individuals are not required to pay for those goods which do not yield any utility to them.