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Question 12 (0.5 points) Saved Which of the following is NOT an example of moral hazard? farmers neglect their livestock in o
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Answer #1

Ques: Option A is correct. Moral Hazard occurs when someone is ready to take more risk as he knows that someone else has to bear the loss due to that risk.

In this case, the farmer knows that in case of any loss insurance company will pay him that is why he is neglecting his livestock because he knows he will receive the insurance payout in case of any loss.

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