?

AP® Microeconomics

Free Version

Upgrade subject to access all content

Moderate

Market Failure: Information Asymmetry/Moral Hazard

APMICR-KNYSGG

Which one of the following represents the problem of moral hazard?

A

The increased incidence of cancer in the area surrounding a factory that disposes of toxic chemicals in a local river.

B

The satisfaction gained by people who live near an outdoor amphitheater from listening to concerts without attending.

C

The income sacrificed while attending college.

D

The decision of a woman who develops diabetes to get health insurance.

E

The choice of banks to make riskier loans after the FDIC begins to insure their deposits.