Which of the following is an example of moral hazard?
Answer choices
A buyer who makes a large raise in bid at an auction to discourage other bidders.
A doctor who performs a large number of in-office tests and is paid per test.
An elderly couple who elect a generous medical insurance policy.
A board of directors that is trying to refine the compensation system for its CEO.
A pitcher (about to sign with a new team) who is aware of a nagging elbow pain.
A doctor who performs a large number of in-office tests and is paid per test.
Explanation: A moral hazard is a situation when someone benefits at a potential cost to others.
Which of the following is an example of moral hazard? Answer choices A buyer who makes...