What is the classic example of moral hazard
A)the market for used cars
B)the market for new houses
C)the relationship between a buyer and a seller
D)the relationship between a worker and his employer

Question

Quizplus · Accepted Answer

Moral hazard occurs when one party takes more risks because they do not have to bear the full consequences of those risks. In the relationship between a worker and an employer, a worker might shirk responsibilities or take undue risks because the employer bears the cost.

What Is the Classic Example of Moral Hazard