An example of moral hazard is
A)workers shirking when the boss is not looking
B)health care insured workers dieting and exercising
C)drivers of safer cars turning their phones off before driving
D)borrowers investing their loan proceeds exactly as the bank requires

Question

​An example of moral hazard is
A)​workers shirking when the boss is not looking
B)health care insured workers dieting and exercising
C)drivers of safer cars turning their phones off before driving
D)​borrowers investing their loan proceeds exactly as the bank requires

Quizplus · Accepted Answer

Moral hazard refers to a situation where one party takes undue risk because the cost of that risk will be borne by another party. The workers shirking when the boss is not looking is an example of moral hazard because the cost of the workers taking it easy is borne by the employer, who pays their wages regardless of their effort.

​An Example of Moral Hazard Is

An Example of Moral Hazard Is