Asked by Lydia Oliver on Sep 24, 2024
Verified
An example of moral hazard is
A) people drive less carefully in icy conditions with antilock brakes than without
B) people drive as safely with more airbags as without
C) football players avoid 'spearing' with their heads even with safer helmets
D) people read the medicine warnings as carefully when self-medicating as with a doctor's prescription
Antilock Brakes
A safety system in vehicles that prevents the wheels from locking up and ensures the driver maintains steering control during an emergency braking situation.
Less Carefully
Pertaining to actions or tasks performed with a lower degree of diligence or attentiveness.
- Attain an understanding of the moral hazard notion in the contexts of insurance and employment situations.
Verified Answer
AB
Ahmad Behrouzi3 days ago
Final Answer :
A
Explanation :
Moral hazard refers to the increased risk-taking behavior by individuals or institutions because they are insured or protected against losses. In this case, people drive less carefully in icy conditions with antilock brakes than without, because they feel safer with the technology and are less likely to suffer a loss.
Learning Objectives
- Attain an understanding of the moral hazard notion in the contexts of insurance and employment situations.