Limited access

Upgrade to access all content for this subject

Which of the following best illustrates the market failure known as moral hazard?

A

A person who has airbags in her car begins to drive more cautiously because she fears having the airbags deploy.

B

After obtaining an extended warranty for his phone, a student decides he no longer needs to keep it in its protective case.

C

A worker fails to wear her safety glasses when operating machinery even though she knows she can be fired for this.

D

People eat healthier foods in order to keep their health insurance premiums lower.

E

A homeowner continues to burn leaves in his yard even though it prevents his neighbors from being able to enjoy outdoor activities.

Select an assignment template