A person starts practicing poisonous snake charming after signing a contract with a health insurance company. This is an example of
A)moral hazard.
B)adverse selection.
C)signaling.
D)screening.

Question

Quizplus · Accepted Answer

Moral hazard refers to the situation where the behavior of an insured person changes after purchasing insurance, leading to an increased likelihood of a loss. In this case, the person may be more likely to take risks with poisonous snakes since they know that their health insurance will cover any medical expenses that may arise.

A Person Starts Practicing Poisonous Snake Charming After Signing a Contract