Moral Hazard Is

Multiple Choice

Moral hazard is:

A) the tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions.
B) when people engage in behavior that is considered highly desirable by the person who bears the cost of the behavior.
C) when buyers and sellers have different information about the quality of a good or the riskiness of a situation.
D) when buyers and sellers with the same information about the quality of a good or the riskiness of a situation agree to a somewhat shady deal.