The tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions is called:
A. moral hazard.
B. adverse selection.
C. counter information.
D. collective bargaining.
A. moral hazard.
You might also like to view...
The Bigdrill company drills for oil, which it sells for $200 million to the Bigoil company to be made into gas. The Bigoil company's gas is sold for a total of $600 million
What is the total contribution to the country's GDP from companies Bigdrill and Bigoil? A) $200 million B) $400 million C) $600 million D) $800 million
Which of the following is most likely produced in a monopolistically competitive market?
a. restaurant meals b. computer chips c. firewood d. motorcycles e. soft drink
Most studies indicate that the degree of income inequality in the United States has
a. been increasing in recent decades. b. been declining in recent decades. c. been constant since 1970. d. fluctuated widely from year to year.
Given the production function and total cost function shown in Chapter 4, as production increases, average variable costs
A. decrease for a while and then increase. B. decrease constantly. C. increase constantly. D. increase for a while and then decrease.