If a Person Drives with Less Care After Purchasing Auto

question 18

Multiple Choice

If a person drives with less care after purchasing auto insurance, this situation would be an example of a(n)

• A) reverse wealth problem.
• B) negative externality problem.
• C) adverse selection problem.
• D) moral hazard problem.

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Definitions:

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.

Social Striving

The increase in effort and motivation when individuals work in groups as compared to when they work alone, due to social influences.

Originality

The quality of being novel or unusual, often associated with creative thinking and innovation.

Flexibility

The capacity to be easily modified or adapted to accommodate new conditions or circumstances.