Asked by MUHAMMAD HASNAIN on Sep 24, 2024

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​Many spouses complain that their partners put less effort into their relationship after getting married.This is an example of

A) ​Moral hazard
B) Adverse selection
C) Terrible husbands
D) ​None of the above

Moral Hazard

A situation in which one party is motivated to take undue risks because the consequences of those risks will be borne by another party.

Less Effort

The minimal amount of work or energy applied to accomplish a task or objective.

Relationship

A connection or association between two or more concepts, objects, or individuals, often highlighting how they interact or affect each other.

  • Familiarize yourself with the idea of moral hazard, covering its triggers and resultant impacts.
  • Acknowledge representations of moral hazard in personal and professional environments.
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NS
Nidhi Sharma2 days ago
Final Answer :
A
Explanation :
Moral hazard occurs when one party in a transaction has the opportunity to assume additional risks that negatively affect the other party because they do not bear the full consequences of their actions. In the context of marriage, if one spouse puts less effort into the relationship after getting married, knowing that they already have the commitment of the other, it exemplifies moral hazard. They may feel less incentivized to maintain the same level of effort or behavior that was present before the marriage, as the perceived risk of losing the relationship may seem lower.