Author Question: Which of the following is an application of the moral-hazard problem? a. a person buying insurance ... (Read 81 times)

serike · **on:** Jul 1, 2018

Which of the following is an application of the moral-hazard problem?
a. a person buying insurance after a cancer diagnosis.
b. an salesperson who is not paid on commission being rude to customers.
c. coffee hounds buying the menu item meant for lower-demand consumers.
d. only inexperienced workers applying for a managerial job advertised with a relatively low salary.

Question 2

An example of adverse selection is
a. purchasing a new car sight unseen based on the recommendation of a neighbor.
b. high health-insurance premiums resulting from the poor health of people who buy policies.
c. suppliers who charge more for better quality clothing than for lower quality clothing.
d. being talked into buying a low-quality item because the price is lower.