Principles of Microeconomics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165905
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 22, Problem 1QR
To determine
Moral hazard.
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What is moral hazard?
Someone indicated that employee’s absence from work despite meeting the eight hours per day requirement affect productivity and increase cost of business. If an employee makes up the hours by coming early and leaving late, how can you call it an example of moral hazard when the manager can easily correct this behavior? Please explain to the class.
give an example of an existing economic interaction that exhibits moral hazard. describe the setting and talk about efficiency considerations.
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Principles of Microeconomics, 7th Edition (MindTap Course List)
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- What would explain why moral hazard might not occur after the large gains in health insurance coverage?arrow_forwardCyclists travel faster on their bicycles when wearing helmets. Is this an example of adverse selection or moral hazard?arrow_forwardWhat is overconsumption doing to our health?arrow_forward
- define and explain the importance of moral hazardarrow_forwardWhat is Moral Hazard, and how does moral hazard affect the likelihood a population demands medical care and the total demand for medical care?arrow_forwardWhat are some strategies for reducing adverse selection in insurance markets? What sorts of problems do these solutions cause?arrow_forward
- What are adverse selection and moral hazard?arrow_forwardCompare and contrast the differences between moral motivation and economic motivation. What are two reasons why a person would be interested in being ethical and classify those reasons in terms of whether they represent moral motivation or economic motivation.arrow_forwardHow do you think the problem of moral hazard might have affected the safety of sports such as football and boxing when safety regulations started requiring that players wear more padding?arrow_forward
- The Tucker family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a deductible of $1,000 per person. If one family member has doctor and prescription medication expenses of $2,200, what amount would the insurance company pay?arrow_forwardA Grab driver who does not own the car is very harsh on his driving as he knows that the car is not his. Is this an example of a moral hazard problem? How does moral hazard issue arise?arrow_forwardHow have conmunications changed over the past 30 years? For the better or worse?arrow_forward
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