Identify each of the following as an adverse selection or a moral hazard problem a. A person with car insurance fails to lock his car doors when he shops at a mall. b. A person with a family history of cancer purchases the most complete health coverage available. c. A person with health insurance takes more risks on the ski slopes of Aspen than he would without health insurance. d. A college professor receives tenure (assurance of permanent employment) from her employer. e. A patient pays his surgeon before she performs the surgery

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Moral Hazard

The moral is a person's behavior towards himself /herself, society, organization, and others. Hazard is something that is happening and is not good. A person may be morally good or bad. It depends on his attitude, ethics, integrity, and values. A person may have the highest reverence for money to that for the truth. In this case, the person may lie and it is said that the person is morally bad.