An example of moral hazard is
a. A taxi driver paid per mile taking the shortest route
b. a piece-rate garment worker shirking more than a per hour worker
c. an hourly salesman working less hard than a commission salesman
d. an author on contract going to as many book signings as one with a percentage royalty rate
c
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The consumer price index (CPI) _____ inflation because it includes an item in the market basket only after the product becomes _____
a. overstates; unpopular b. overstates; obsolete c. overstates; widely used d. understates; widely used e. understates; obsolete
Demand for inputs is a derived demand because
A. it is derived from the need for income. B. it corresponds to the derived supply of the inputs. C. producers want the input to produce the finished good. D. it is downward sloping.