Multiple Choice
Which of the following best illustrates the problem of moral hazard?
A) a professional baseball team that consistently drafts poor players
B) an individual that is hiding a pre-existing condition from a health insurance provider
C) an increase in the level of one's income will lead to a decrease in demand for inferior goods
D) an economic agent that engages in risky behavior once a loan contract is signed
Correct Answer:
Verified
Correct Answer:
Verified
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