When a Moral Hazard Problem Exists for Automobile Driving, the Marginal

question 55

Multiple Choice

When a moral hazard problem exists for automobile driving, the marginal cost of driving:

• A) is lowered, and the amount of driving done is raised above the efficient level.
• B) is lowered, and the amount of driving done is lowered below the efficient level.
• C) is raised, and the amount of driving done is raised above the efficient level.
• D) is raised, and the amount of driving done is lowered below the efficient level.
• E) is raised above the efficient level, but market forces keep the total amount of driving is kept at the efficient level.

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Definitions:

Socioeconomic Status

An individual's or family's economic and social position in relation to others, based on income, education, and occupation.

Occupational Attainment

The level of achievement an individual has reached in their career, often measured by their job title, status, and income.

Cultural Capital

Non-material assets that include education, intellect, style of speech, and dress, which can give an individual a higher status in society.

Social Reproduction

The tendency of social classes to remain relatively stable as class status is passed down from one generation to the next.