An example of moral hazard is
a. people drive as carefully in icy conditions with antilock brakes as without
b. people drive as safely with more airbags as without
c. football players avoid 'spearing' with their heads even with safer helmets
d. people fail to read the medicine warnings more often when self-medicating versus with a doctor's prescription
d
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Kenya owns a lawn mowing company. His total product schedule is in the above table. When 4 workers are employed, the average product is ________ lawns mowed per week
A) 80 B) 25 C) 20 D) 5 E) 320
Explain why using a firm's profits to reinvest in the company is really not "free borrowing"?
What will be an ideal response?
The most popular floating rate in swaps is
A) LIBOR. B) the Treasury note rate. C) the prime rate. D) the six-month Treasury bill rate.
_____ refers to the situation faced by an insurance plan whose costs steadily increase as worse risks migrate toward it and better risks migrate away
a. Adverse selection b. Lemons problem c. Moral hazard d. Death spiral