Suppose a fiRm Offers Its Workers a Cafeteria Plan in Which

Multiple Choice

Suppose a firm offers its workers a cafeteria plan in which it allows workers to allocate a set amount of fringe benefit money toward specific insurance. Mary, who has five kids needing braces, selects
The family dental coverage. This is an example of the

A) free-rider problem.
B) principal-agent problem.
C) adverse selection problem.
D) moral hazard problem.