The problem of moral hazard arises because
a. life is full of all sorts of risks.
b. after people buy insurance, they have less incentive to be careful about their risky behavior.
c. a high-risk person is more likely to apply for insurance than is a low-risk person.
d. insurance companies go to great effort to avoid paying claims to their policy holders.
b
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An economic ________ refers to either an upturn or a downturn in the economy
A) fluctuation B) stagnation C) model D) chain index
In the above figure, the shift in the supply curve from S to S2 reflects
A) an increase in the supply of pizza. B) an increase in the quantity of pizza supplied. C) a decrease in the quantity of pizza supplied. D) a decrease in the supply of pizza. E) a decrease in the supply of pizza and a simultaneous decrease in the quantity of pizza supplied.