What Is Moral Hazard

Multiple Choice

What is moral hazard?

A) The tendency for people to engage in behavior that is considered highly desirable by the person who bears the cost of the behavior.
B) A situation in which buyers and sellers have different information about the quality of a good or the riskiness of a situation.
C) An agreement made between buyers and sellers who have the same information about the quality of a good or the riskiness of a situation.
D) The tendency for people to behave in a riskier way or put forth less effort when they do not face the full consequences of their actions.