Which of the Following Best Illustrates the Problem of Moral

question 21

Multiple Choice

Which of the following best illustrates the problem of moral hazard?

• A)a professional baseball team that consistently drafts poor players
• B)an individual that is hiding a pre-existing condition from a health insurance provider
• C)an increase in the level of one's income will lead to a decrease in demand for inferior goods
• D)an economic agent that engages in risky behavior once a loan contract is signed

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Definitions:

Strategic Focus

The act of concentrating a company's efforts and resources on a particular business strategy or goal to achieve competitive advantage.

Core Competency

A defining strength or advantage of a business, critical to its success and difficult for competitors to imitate.

Formal Business Plan

A detailed document prepared by a company outlining its objectives, strategies, financial forecasts, and market analysis to guide its operations and attract potential investors.

Visuals

The use of graphical elements in marketing and communication to convey messages and engage audiences.