Consider the Following Two Situations

question 104

Multiple Choice

Consider the following two situations. Nicole accepts a job where she will be driving in dangerous traffic, so she seeks auto insurance. After Braden buys health insurance, he visits the gym less frequently. Which of these person's actions illustrates moral hazard?

• A)both Nicole's and Braden's
• B)Nicole's but not Braden's
• C)Braden's but not Nicole's
• D)neither Braden's nor Nicole's

Appreciate the effects of illegal activities or changes in law on the agency relationship.

Comprehend the process and requirements for agency contracts' ratification by principals.

Learn about the rights and obligations of parties in case of undisclosed principal.

Understand the importance of fiduciary duties and the requirement for agents to prioritize principals' interests.

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Definitions:

Exclusive Dealing

An arrangement where a retailer or distributor is restricted by a supplier from selling products of a competitor.

Brand Loyalty

The tendency of consumers to continue buying the same brand's products or services over time, often due to satisfaction or perceived value.

Retailers

Businesses or persons that sell goods directly to consumers for personal use.

Defensive Pessimists

Individuals who employ a strategy of anticipating negative outcomes in order to manage expectations and prepare for challenges.