Which of the following best illustrates the problem of moral hazard?
A) a professional baseball team that consistently drafts poor players
B) an individual that is hiding a pre-existing condition from a health insurance provider
C) an increase in the level of one's income will lead to a decrease in demand for inferior goods
D) an economic agent that engages in risky behavior once a loan contract is signed
D
Economics
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Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and a decrease in quantity demanded are represented by a movement from
A) point c to point a. B) point c to point d. C) point b to point c. D) point a to point d.
Economics
Coinsurance reduces moral hazard in exactly the same way as
A) limits on insurance. B) risk-based premiums. C) deductibles. D) restrictive provisions.
Economics