When a motorist speeds down the road at well above the posted limit, economists believe that the principle of ____ may be directing his actions.

Question

Quizplus · Accepted Answer

The principle of moral hazard refers to the situation where a party is more likely to take risks because they will not bear the full cost of those risks. In the case of a speeding motorist, they may be taking the risk of getting a ticket or causing an accident because they believe they will not bear the full cost of those consequences. This can lead to risky behavior and potentially dangerous outcomes.

When a Motorist Speeds Down the Road at Well Above