The phenomenon in which an insured individual takes less care in preventing the event against which she is insured is an example of

double coincidence of wants.

moral hazard.

adverse selection.

foolish behavior.

Question

Business

Manuel Lambert

31 March, 01:49

The phenomenon in which an insured individual takes less care in preventing the event against which she is insured is an example of

double coincidence of wants.

moral hazard.

adverse selection.

foolish behavior.

+4

Answers (1)

Know the Answer?

Mathew Young · Answer 1

Answer: Moral hazard

Explanation: Moral hazard can be defined as a situation in which an individual starts taking more risk, which he can avoid, knowing the fact that the potential loss of the risk taken will be bore by someone else.

For example - An Individual not making proper fire extinguishing facilities in the house knowing that the loss in case of fire will be bore by the insurance company.

Hence, above explanation concludes that answer is option B.

The phenomenon in which an insured individual takes less care in preventing the event against which she is insured is an example ofdouble coincidence of wants.moral hazard.adverse selection.foolish behavior.

The phenomenon in which an insured individual takes less care in preventing the event against which she is insured is an example of

double coincidence of wants.

moral hazard.

adverse selection.

foolish behavior.