When a Moral Hazard Problem Exists for Automobile Driving, the Marginal

Multiple Choice

When a moral hazard problem exists for automobile driving, the marginal cost of driving:

A) is lowered, and the amount of driving done is raised above the efficient level.
B) is lowered, and the amount of driving done is lowered below the efficient level.
C) is raised, and the amount of driving done is raised above the efficient level.
D) is raised, and the amount of driving done is lowered below the efficient level.
E) is raised above the efficient level, but market forces keep the total amount of driving is kept at the efficient level.