Which of the Following Are Examples of the Moral Hazard

question 17

Multiple Choice

Which of the following are examples of the moral hazard problem? (i) the employment relationship between a worker and an employer
(ii) an insured homeowner who buys too many fire extinguishers
(iii) homeowners who choose to live in a high flood risk area when the government bears the cost of disaster relief

• A)(i) only
• B)(i) and (ii)
• C)(i) and (iii)
• D)(ii) and (iii)

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Definitions:

Sensory Processing

The way the nervous system receives messages from the senses and turns them into appropriate motor and behavioral responses.

Neural Information

Data processed and transmitted by the nervous system, particularly the brain, to enable bodily functions and cognitive processes.

Sensory Stimuli

External or internal inputs that are perceived by the sensory organs, leading to various forms of responses or reactions from an organism.

Coffee Aroma

The scent produced by coffee, often described as rich, warm, and inviting; this aroma is credited with providing psychological comfort and increasing alertness.