Which of the Following Is an Example of Moral Hazard

question 72

Multiple Choice

Which of the following is an example of moral hazard?

• A)A car salesman earns a commission of 10 percent on every car sold.
• B)An individual who eats well and exercises regularly chooses not to purchase health insurance.
• C)An individual drives less cautiously after obtaining automobile insurance.
• D)A car salesman offers a full warranty on a used car for 90 days.
• E)A person brings a mechanic to check a used car before buying it.

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Definitions:

Agent

An individual or entity that acts on behalf of another, in various contexts such as sociology, espionage, or business transactions.

Hidden Curriculum

involves the unwritten, unofficial, and often unintended lessons, values, and perspectives that students learn in school.

Socialized Citizen

An individual who has been inculcated with the norms, values, and practices of a society, enabling them to function as a contributing member.

Primary Socialization

The early process by which individuals, typically in their childhood, learn and adopt the values, behaviors, and norms of their society or cultural group.