(Solved):A person develops a hobby of motorcycle racing after signing a contract with a life insurance company. This is an example of A) adverse selection. B) screening. C) signaling. D) moral hazar View Answer…

 

Question

A person develops a hobby of motorcycle racing after signing a contract with a life insurance company. This is an example of

A) adverse selection.

B) screening.

C) signaling.

D) moral hazard.

 

EXPERT ANSWER

  • The correct option is D. Moral Hazard.

The term moral hazard is one of the types of market failure that depicts the change in the consumer behavior towards taking a risk when they know the full cost of misshapen will be not paid

Scroll to top