Answered: What is Moral Hazard, and how does…

What is Moral Hazard, and how does moral hazard affect the likelihood a population demands medical care and the total demand for medical care?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 15P

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Concept explainers

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.

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What is Moral Hazard, and how does
moral hazard affect the likelihood a
population demands medical care and
the total demand for medical care?

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How is the moral hazard problem relevant to the health care market?
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