Multiple Choice
Alex just got a new car. Because Alex obtained full-coverage car insurance, Alex will have an incentive to ________ because of ________.
A) drive more cautiously than if he didn't have insurance; moral hazard
B) drive more cautiously than if he didn't have insurance; adverse selection
C) drive less cautiously than if he didn't have insurance; adverse selection
D) drive less cautiously than if he didn't have insurance; moral hazard
Correct Answer:
Verified
Correct Answer:
Verified
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