Which of the following best demonstrates the problem of moral hazard ?

Related Mcqs:

Which of the following is an example of a signal that is used to reveal private information ?

A. Enzo carefully chooses a special gift for Josephine B. Josephine earns her MBA from the Harvard Business School C. Lexus advertises its cars during the football World Cup Final. D. All of these answers are correct...

Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?

A. They pay employees with delayed compensation such as a year-end bonus B. They buy life insurance on their workers C. They pay above equilibrium wages D. They put hidden video cameras in the workplace...

A life insurance company forces Enzo to have a medical examination prior to selling him insurance ?

A. transitivity B. impossibility C. independence D. unanimity...

Which of the following is not true about how people make decisions ?

A. people give too much weight to a small number of vivid observations B. People are sometimes too sure of their own abilities C. All of these answers are actually true statements about how people make decisions. D. People are always rational maximizers E. People are reluctant to change their minds in the face of … Which of the following is not true about how people make decisions ?Read More...

Which of the following help explain why firms pay bonuses to workers during particularly profitable years to prevent workers from becoming disgruntled ?

A. people are rational maximizers B. People are reluctant to change their minds C. People are inconsistent over time D. People care about fairness...