As It Applies to Insurance, the Moral Hazard Problem Is

question 104

Multiple Choice

As it applies to insurance, the moral hazard problem is the tendency for

• A) those most likely to collect on insurance to buy it.
• B) those who buy insurance to take less precaution in avoiding the insured risk.
• C) sellers to price discriminate.
• D) sellers to restrict output and charge high prices.

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Definitions:

Neurons

Nerve cells specialized for transmitting electrical and chemical signals throughout the body and brain.

Synapse

a structure that permits a neuron (nerve cell) to pass an electrical or chemical signal to another neuron or to the target effector cell.

Electrical Activity

The movements of charged particles, such as electrons, which can occur within a variety of systems, including the neural circuits in the body.

Chemical Activity

The behavior of chemicals interacting with each other, including reactions that involve changes in molecular structure.