Microeconomics 20th Edition by McConnell, Sean Flynn, Stanley Brue

Exercise 4

All MegaCorp employees who stay on the job for more than three years are rewarded with a 10 percent pay increase and coverage under a private health insurance plan that MegaCorp pays for. Tina just passed three years as a MegaCorp employee and reacts to having health insurance by taking up several dangerous sports because now she knows that the insurance plan will pay for any injuries that she may sustain. This change in Tina's behavior is known as:
A) Defensive medicine.
B) Asymmetric information.
C) The moral hazard problem.
D) The personal mandate.