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.
Correct Answer:
Verified
Correct Answer:
Verified
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