Scenario 22-1 Esteban and Michaela Own an Apartment Building. They Hire Nico

question 431

Multiple Choice

Scenario 22-1
Esteban and Michaela own an apartment building. They hire Nico to manage the building and deal with tenants' complaints. They also hire Ted to make any necessary repairs to the apartments or the common area and they hire Rex to be the door guard at night.
-Refer to Scenario 22-1. Which of the following is an example of a moral hazard problem?

• A)Ted steals $5 off the counter in a tenant's apartment while he is there to repair a leaky faucet.
• B)Esteban and Michaela do not tell Nico that they are planning to sell the building at the end of the year.
• C)Esteban goes golfing while Michaela reviews the financials from the business.
• D)Rex is paid an efficiency wage to ensure productivity because he is usually not monitored while working.

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Definitions:

Cocci

Spherical bacteria that can exist as single cells, in pairs, clusters, or chains, often responsible for various infections.

Vibrios

A genus of spiral-shaped bacteria, some species of which can cause foodborne infection, typically acquired from eating undercooked seafood.

Parasites

Organisms that live on or in a host organism and get their food at the expense of their host.

Anaerobes

Organisms, especially bacteria, that do not require oxygen for growth and may even die in its presence.