Which of the Following Is an Example of Moral Hazard

question 104

Multiple Choice

Which of the following is an example of moral hazard?

• A) I hire you to work in my garden for a fixed fee, and you work hard all day.
• B) I hire you to work at an hourly rate and you work as slowly as possible.
• C) You apply for the job only because I pay a fixed wage per day, no matter how much or little you do.
• D) You agree to be paid by the weed to work in my garden, and then don't work hard.

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Definitions:

Specific Measures

Detailed and precise metrics or criteria used for evaluating or assessing particular aspects or phenomena.

Theory of Reasoned Action

A psychological theory that proposes that an individual's intention to engage in a behavior is a primary determinant of whether they will actually do so, influenced by their attitudes and subjective norms.

Actual Intentions

The true motivations or reasons behind an individual's actions or decisions.

Protection Motivation Theory

A theory that explains how individuals are motivated to protect themselves from negative events by evaluating the perceived severity and their vulnerability to the event, as well as the efficacy of protective measures.