which of these situations do we see a problem of moral hazard a) A builder hires a new electrician without knowing how quickly she can work. b) A bank does not tell customers about the circumstances when it can levy charges on their account. c) A hotel company encourages independent reviews of its resorts to attract more tourists. d) A car driver repeatedly forgets to lock his car since he is insured against its theft.

which of these situations do we see a problem of moral hazard a) A builder hires a new electrician without knowing how quickly she can work. b) A bank does not tell customers about the circumstances when it can levy charges on their account. c) A hotel company encourages independent reviews of its resorts to attract more tourists. d) A car driver repeatedly forgets to lock his car since he is insured against its theft.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 1MC

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