Which of the Following Is an Example of Moral Hazard

question 48

Multiple Choice

Which of the following is an example of moral hazard?

• A)The healthiest people buy life insurance.
• B)The sickest people buy health insurance.
• C)A person with health insurance rides a motorcycle without wearing a helmet.
• D)A person with life insurance exercises daily and eats healthy foods.

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Definitions:

Two-factor Theory

A concept in psychology suggesting that emotional experiences arise from a combination of physiological arousal and a cognitive label applied to the source of the arousal.

Cognitive Label

A cognitive label refers to the identification and categorization of an experience or emotion based on cognitive processing.

Schachter's Two-factor Theory

A theory proposing that emotional experiences arise from physiological arousal followed by a cognitive interpretation of that arousal, where the context influences the type of emotion felt.

Arousal

A physiological and psychological state of being awake or reactive to stimuli, often linked to motivation and performance levels.