Moral Hazard

Multiple Choice

Moral hazard:

A) occurs when incentives are distorted because an individual knows more about his or her own actions than other people do.
B) is a term used to describe the bonuses paid for particularly hazardous jobs (such as firefighting) .
C) is a term used synonymously with "value judgment."
D) refers to the questionable morality of price gouging in hazardous times (e.g., in the presence of famines, floods, etc.) .