Which Is NOT an Example of Moral Hazard

question 3

Multiple Choice

Which is NOT an example of moral hazard

• A)people eat more at all-you-can-eat buffets
• B)loggers clear-cut a tract of land rather than when paying per tree felled
• C)Drivers of heavier,safer cares are more likely to run stop signs
• D)workers paid an hourly wage work harder than those on commission

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Definitions:

Disposable Income

This is the amount of money that households have available for spending and saving after income taxes have been accounted for.

Consumption

refers to the total amount of goods and services bought and used by households and individuals.

Savings Rate

The portion of disposable income not spent on consumption of goods and services but saved or invested, usually expressed as a percentage of disposable income.

Consumption

Consumption refers to the use of goods and services by households for personal satisfaction or living standards.