If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of

Question

Quizplus · Accepted Answer

The moral hazard problem refers to the increase in risk-taking or careless behavior by individuals who are insured because they face reduced financial consequences in the event of a loss. This is often seen in health insurance, where insured individuals may be less careful about avoiding accidents or illness because they know that their insurance will cover the costs of treatment.

If an Individual Is Less Careful About Avoiding Accidents or Illness