The Tendency for People to Behave in a Riskier Way

question 137

Multiple Choice

The tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions is called:

• A)moral hazard.
• B)adverse selection.
• C)counter information.
• D)collective bargaining.

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Definitions:

Decrease Retailer Prices

A strategy where retailers lower the prices of goods or services, potentially to increase sales volume or clear inventory.

Vertical Contracts

Arrangements between companies at different levels in the supply chain, such as manufacturers and retailers, to control the supply and price of products.

Benefits

Advantages or favorable outcomes resulting from specific actions, policies, or circumstances.

Promotional Activities

Efforts designed to inform, persuade, or remind potential buyers about a business's products or services, often to boost sales or brand awareness.