(Solved):Moral hazard occurs when: a) an individual knows more about the way things are than other people do. b) an individual has an incentive to violate his or her morals. c) an individual knows more a… View Answer…

 

Question

Moral hazard occurs when:

a) an individual knows more about the way things are than other people do.

b) an individual has an incentive to violate his or her morals.

c) an individual knows more about his or her actions than other people do.

 

EXPERT ANSWER

Answer:b) an individual has an incentive to violate his or her morals

Explanation:

Moral hazard is a situation of asymmetric information. Asymmetric information closely resembles items a and c. Asymmetric information

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