Moral hazard:
A. is about the unobserved actions of people.
B. is about the unobserved characteristics of people.
C. occurs before the parties have entered into an agreement.
D. None of these statements is true.
Answer: A
You might also like to view...
Which of the following examples shows marginal revenue product?
a. The newest staff member, Genevieve, started with a salary of $1,000 per week. b. Stan had sales of $1,000 per week and was paid $700, leaving profit of $300. c. When JP joined the team, the mechanics were able to service six more cars per day. d. A recent hire, Ganesh, added $1,600 per week to the accounting firm’s hourly billing.
If the demand curve for hamburgers is downward sloping and the supply curve for hamburgers is upward sloping, then a tax imposed on hamburgers ________ the price paid by buyers and ________ the price received by sellers.
A) lowers; lowers B) raises; raises C) raises; lowers D) lowers; raises E) does not change; does not change