Which is NOT an example of moral hazard
a. people eat less at all-you-can-eat buffets
b. loggers clear-cut a tract of land when paying a fixed price rather than when paying per tree felled
c. Drivers of heavier, safer cares are more likely to run stop signs
d. workers on commission work harder than those paid an hourly wage
a
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Linda noticed that ever since her brother bought theft insurance for his car, he keeps forgetting to lock his car. Her brother's behavior is an example of ________
A) adverse selection B) moral hazard C) a positive externality D) a pecuniary externality
A family on a trip budgets $800 for restaurant meals and fast food. The price of a fast-food meal is $20 and the family can afford 16 restaurant meals if they don't buy any fast food. How many fast-food meals would the family gain if they gave up one restaurant meal?
a. 1 b. 0.4 c. 2 d. 2.5 e. 5