Your friend works at a coffee shop on campus and regularly gives away free coffee to you and your friends when you visit. This is an example of

Question

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This is an example of a moral hazard problem as the friend may be giving away free coffee without considering the cost and potential negative impact on the business. The friend may also be more likely to give away free coffee to friends, which could lead to preferential treatment and potentially harm the overall fairness and efficiency of the business.

Your Friend Works at a Coffee Shop on Campus and Regularly