Business, 24.04.2020 16:05 qudoniselmore0
When Kevin didn't have renter's insurance, he was very careful not to leave candles lit in his apartment, and he always locked the door when he left. Now that he has renter's insurance, he frequently leaves candles burning and forgets to lock the door because he knows that, even if his apartment catches on fire or gets broken into, his insurance will cover it.
The economic problem in this story is known as:
a) Adverse selection.
b) Signaling.
c) The winner's curse.
d) Moral hazard.
Answers: 3
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