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)

---

Definitions:

Inferiority Complex

A psychological condition where a person feels a deep sense of inadequacy and insufficiency, often leading to overcompensation in other areas.

Carl Rogers

An influential American psychologist who founded the client-centered approach to psychotherapy, emphasizing unconditional positive regard.

Alfred Adler

An Austrian medical doctor and psychotherapist, known for founding the school of individual psychology which emphasizes the uniqueness of the individual and their role in society.

Self-Esteem

An individual's perception of their own worth or value, which can influence their confidence and behavior in various aspects of life.