​An Example of Moral Hazard Is

question 30

Multiple Choice

​An example of moral hazard is

• A)​people drive as carefully in icy conditions with antilock brakes as without
• B)people drive less safely with more airbags than without
• C)football players avoid 'spearing' with their heads even with safer helmets
• D)​people read the medicine warnings as carefully when self-medicating as with a doctor's prescription

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Definitions:

Neoclassical Economists

Economists who focus on how consumers make choices based on their preferences and budgets, and how those choices affect the use of resources and the distribution of goods.

Better Off

A term indicating an improvement in someone's situation or condition, often measured in terms of financial wellbeing, health, or quality of life.

Behavioral Economists

Behavioral economists study how psychological, cognitive, emotional, cultural, and social factors affect economic decisions of individuals and institutions, often challenging the assumption of rational decision-making.

Neoclassical Theories

A broad range of economic theories that emphasize the role of supply and demand in an economy, focusing on the allocation of resources and the distribution of income.