Which of the Following Is an Example of Moral Hazard

question 1

Multiple Choice

Which of the following is an example of moral hazard?

• A) A buyer who makes a large raise in bid at an auction to discourage other bidders.
• B) A doctor who performs a large number of in-office tests and is paid per test.
• C) An elderly couple who elect a generous medical insurance policy.
• D) A board of directors that is trying to refine the compensation system for its CEO.
• E) A pitcher (about to sign with a new team) who is aware of a nagging elbow pain.

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Definitions:

Bullying

Repeated negative behaviour that is directed toward one or more individuals of lower power or status and creates a hostile work environment.

Sexual Harassment

Behaviour that derogates, demeans, or humiliates an individual based on that individual’s sex.

Role Ambiguity

Refers to a lack of clarity about one's job duties, responsibilities, and expectations within an organization, leading to confusion and stress.

Job Resources

The physical, social, or organizational aspects of a job that help individuals achieve work goals, reduce job demands, and stimulate personal growth and development.