Which is NOT an example of moral hazard
A)people eat less at all-you-can-eat buffets
B)loggers clear-cut a tract of land when paying a fixed price rather than when paying per tree felled
C)Drivers of heavier,safer cares are more likely to run stop signs
D)workers on commission work harder than those paid an hourly wage

Question

​Which is NOT an example of moral hazard
A)​people eat less at all-you-can-eat buffets
B)loggers clear-cut a tract of land when paying a fixed price rather than when paying per tree felled
C)Drivers of heavier,safer cares are more likely to run stop signs
D)​workers on commission work harder than those paid an hourly wage

Quizplus · Accepted Answer

Moral hazard refers to the tendency of people or organizations to take greater risks when they are insulated from the consequences of their actions. Eating less at an all-you-can-eat buffet does not involve any greater risk-taking or insulation from consequences, and is therefore not an example of moral hazard. Choices B, C, and D are all examples of moral hazard, as they involve greater risk-taking or insulation from consequences due to the structure of the incentives involved.

​Which Is NOT an Example of Moral Hazard

Which Is NOT an Example of Moral Hazard