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:

Long Term

Referring to a prolonged period of time, often extending for years or even decades.

Cardiac Problems

Health issues related to the heart that can range from minor disruptions to serious conditions like heart attacks and diseases.

Cortisol Production

The process of producing cortisol, a steroid hormone released in response to stress and low blood-glucose concentration.

Angry or Depressed

A state or condition marked by feelings of annoyance or displeasure, or a mood disorder causing persistent feelings of sadness and loss of interest.