Morgan Has a Problem

question 44

Multiple Choice

Morgan has a problem.Her date has been late the last three times to pick her up and this upsets her.Tonight her date is late again.What should she say?

• A) "I can't believe you are late for the fourth time. This really upsets me! Why are you always so late?"
• B) Nothing, but when he asks, "What's wrong?" reply as coldly as possible "Nothing."
• C) "This is the fourth time you have been late. I want you to know how much this hurts me. Maybe the next time you should call from the car phone and let me know you are running late."
• D) "This is the fourth time you have been late. I want you to know how much this hurts me. I wonder if your mother knows how you disrespect me?"

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Definitions:

Moral Hazard

The situation that can exist when an individual knows more about his or her own actions than other people do. This leads to a distortion of incentives to take care or to expend effort when someone else bears the costs of the lack of care or effort.

Risk Aversion

The tendency to prefer certainty over uncertainty, avoiding risk in decision-making or preferring safer investments.

Insurance

A means of protection from financial loss, characterized by the transfer of risk from one entity to another in exchange for payment.

Consumer

An individual or group who purchases goods and services for personal use.