Author Question: Which of the following is NOT an example of either moral hazard or adverse selection? (Read 39 times)

newyorker26 · **on:** May 25, 2020

Question 1

Insurance companies can reduce the moral hazard problem with which of the following methods?
◦ Raising the insurance premium
◦ Making the insured pay the first £50 of any insurance claim themselves
◦ Offering a no claims bonus
◦ A and B

Question 2

Which of the following is NOT an example of either moral hazard or adverse selection?
◦ A business owner/manager doing fewer hours work than his employees
◦ An individual not pointing out their worst characteristics on a job application form
◦ A student not being as careful with their spending levels when the student's parents are paying his/her credit card bill
◦ A shop worker doing less work on the days when the boss is not in the shop

diesoon · **Reply #1 on:** May 25, 2020

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