Moral Hazard Occurs When Individuals

question 139

Multiple Choice

Moral hazard occurs when individuals:

• A) do not do what is in their own best interest.
• B) know more about acceptable business behaviour than other people do.
• C) have an incentive to violate their morals.
• D) know more about their actions than other people do.

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Definitions:

Value Chain Analysis

Value Chain Analysis is a process of examining the development of competitive advantage, focusing on the chain of activities involved in designing, producing, marketing, delivering, and supporting a product or service.

Effective

Achieving the desired outcome or result with optimal use of resources and time.

Manageable

Capable of being controlled, handled, or dealt with effectively.

Value Chain

A model that describes the full range of activities needed to create a product or service, from initial conception to final use and beyond.