Identify Whether Any of the Following Situations Is a Moral

question 31

Essay

Identify whether any of the following situations is a moral hazard, adverse selection, or principal-agent problem. Explain your reasoning in each case.
a. A person in poor health purchases life insurance.
b. A consumer is taxed on the purchase of a carton of cigarettes.
c. A driver purchases auto insurance and then drives more recklessly.
d. A computer programmer works from home on a fixed salary.

Identify factors that influence the likelihood of engaging in System II thinking.

Analyze the impact of cognitive biases on judgment and decision-making.

Understand the role of intuition and analysis in cognitive processes.

Describe the implications of dual-process theory for understanding human judgment and decision-making.