Scenario 22-1 Esteban and Michaela Own an Apartment Building. They Hire Nico

question 431

Multiple Choice

Scenario 22-1
Esteban and Michaela own an apartment building. They hire Nico to manage the building and deal with tenants' complaints. They also hire Ted to make any necessary repairs to the apartments or the common area and they hire Rex to be the door guard at night.
-Refer to Scenario 22-1. Which of the following is an example of a moral hazard problem?

• A)Ted steals $5 off the counter in a tenant's apartment while he is there to repair a leaky faucet.
• B)Esteban and Michaela do not tell Nico that they are planning to sell the building at the end of the year.
• C)Esteban goes golfing while Michaela reviews the financials from the business.
• D)Rex is paid an efficiency wage to ensure productivity because he is usually not monitored while working.

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Definitions:

Autobiographical Memories

The aspect of memory that pertains to recollections of personal experiences that occurred at specific times and places in one's life.

Deese/Roediger-McDermott Paradigm

A psychological experiment method demonstrating how easy it is to induce false memories by presenting lists of related words and later suggesting a word not actually presented.

Autobiographical Memories

Memories of one's own life experiences, encompassing both episodic (specific events) and semantic (general knowledge and facts about one’s life) components.