After Johan purchased a full coverage insurance policy for his car,he is not careful and leaves his car unlocked at all times.This is an example of
A) adverse selection.
B) a thin market.
C) moral hazard.
D) asymmetric information.

Question

Quizplus · Accepted Answer

This is an example of moral hazard, where Johan is taking more risks because he is protected by the insurance policy and does not bear the full costs of any potential losses or damages.

After Johan Purchased a Full Coverage Insurance Policy for His