An example of moral hazard is
A)people drive less carefully in icy conditions with antilock brakes as without
B)people drive as safely with more airbags as without
C)football players avoid 'spearing' with their heads even with safer helmets
D)people read the medicine warnings as carefully when self-medicating versus with a doctor's prescription

Question

Quizplus · Accepted Answer

Moral hazard occurs when individuals take more risks because they do not bear the full consequences of those risks. In option A, people drive less carefully because they rely on the safety feature of antilock brakes, demonstrating moral hazard.

An Example of Moral Hazard Is