Penny,a bit of a hypochondriac,decides that she should have MRIs covering her whole body and insists that her doctor order them.Penny tells her doctor that she is not concerned about cost because she has great insurance.Which of the following is the appropriate and recognized term for the problem associated with her behavior as far as an insurer is concerned?

Question

Quizplus · Accepted Answer

Moral hazard suggests that individuals who are insulated from risk sometimes behave differently. An insured might have very high expectations with regard to medical tests because the insurance company covers the cost.

Penny,a Bit of a Hypochondriac,decides That She Should Have MRIs