(Solved):Because the federal government typically provides disaster relief to farmers, many farmers do by buy crop insurance even though it is federally subsidized. This illustrates: a. the adverse selectio… View Answer…

 

Question

Because the federal government typically provides disaster relief to farmers, many farmers do by buy crop insurance even though it is federally subsidized. This illustrates:

a. the adverse selection problem

b. the special interest effect

c. logrolling

d. the moral hazard problem

 

EXPERT ANSWER

Because the federal government typically provides disaster relief to farmers, many farmers do by buy crop insurance even though it is federally subsidized. This illustrates:

  • d. the moral hazard problem.

Moral hazard is a

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