After Luis received health insurance from his job as an accountant,he decided to become a skydiver on the weekends because he knew that his health insurance from his employer would cover most of his medical costs if he were injured.Which of the following statements is true?

Question

Quizplus · Accepted Answer

The moral hazard problem is the tendency for people to take more risks or be less careful when they are insured because they know they will be protected from some of the adverse consequences. In this case, Luis is more likely to take on a risky activity like skydiving because he knows his health insurance will cover his medical costs if he gets injured. Thus, the moral hazard problem is increased.

After Luis Received Health Insurance from His Job as an Accountant,he