Author Question: A person covered by a generous insurance plan smokes more cigarettes than he does normally. This is ... (Read 55 times)

fasfsadfdsfa · **on:** Jun 30, 2018

A person covered by a generous insurance plan smokes more cigarettes than he does normally. This is an example of a:
a. lemon problem.
b. moral hazard.
c. adverse selection.
d. risk selection.

Question 2

A risky borrower can pay a lower interest rate if:
a. she invests the amount in a profitable business.
b. she can assure the lender of a low inflation rate.
c. she makes a promise to repay within a short interval.
d. she can arrange for a collateral.