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:

Realists

Individuals who base their perception of reality on the physical world, accepting it as it truly is, often in contrast to idealists.

Cubists

Artists associated with the Cubism movement, which emphasized abstract forms and the fragmentation of objects into geometric shapes.

Medievalists

Scholars who specialize in the study of the medieval period, encompassing history, literature, art, and culture of that era.

Kinesthetic Sense

The ability to perceive and control body movements and position through the sensing of muscle and joint motion.