The Basic Idea Behind Moral Hazard Is That ________

question 50

Multiple Choice

The basic idea behind moral hazard is that ________.

• A) some economic transactions impose an additional cost on society
• B) some economic transactions give rise to an additional benefit to society
• C) people tend to take more risks if they do not have to bear the costs of their behavior
• D) people do not reveal their true preference for goods that are non-excludable in consumption

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Definitions:

Warfarin

A medication used to prevent blood clots by inhibiting vitamin K-dependent clotting factors.

Anticoagulant

Agent that prevents coagulation.

Eosinophils

White blood cells involved in the body's immune response, particularly known for their role in combating parasites and in allergic reactions.

Heparin

A medication and naturally occurring substance that prevents blood clotting, often used in medical settings to reduce the risk of thrombosis.