The governments role in terrorism insurance is that of  - disinterested observer  - innocent bystander  - a reinsurance provider of last resort/ re-insurer

Q: How can deductibles, copayments, and coinsurance reduce moral hazard?

A: A moral hazard is a situation of asymmetric information that arises when one party has an incentive…

Q: Differentiate between adverse selection and moral hazard problems with one examples

A: Market failure is the situation when a market is operated at the level where market demand does not…

Q: give an example of an existing economic interaction that exhibits moral hazard. describe the setting…

A: Moral hazard refers to the concept that signifies that an individual has the opportunity to change…

Q: An closest example of a risk-free security is

A: Risk-free security refers to that security which has a certain return and there is no possibility of…

Q: You sell bicycle theft insurance. If bicycle owners do not know whether they are high or low risk…

A: Individuals purchase insurance to cover themselves against the potential risk of loss. There are…

Q: How do conflicts of interest make the asymmetricinformation problem worse?

A: Conflict of interest refers to a situation where an individual or organization is involved in…

Q: What are moral hazard and adverse selection? How are they similar, how are they different? What…

A: Asymmetric information refers to the situation when there is incomplete information or knowledge in…

Q: Explain the relationship between moral hazard and insurance premiums

A: Insurance premiums are the small fragments of the loans and the interest or say the policy coverage.…

Q: Adverse selection occurs because of      A) spreading of risks. B) diminishing marginal utility. C)…

A: Adverse selection occurs because of imperfect information, when the seller have information about…

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.