Lightweight personal locator beacons are now available to hikers, making it easier for the Forest Service's rescue teams to locate those lost or in trouble in the wilderness. True or False: Moral hazard is unlikely to be present in this situation.

Question

Social Studies

Liana Shannon

13 April, 10:59

Lightweight personal locator beacons are now available to hikers, making it easier for the Forest Service's rescue teams to locate those lost or in trouble in the wilderness. True or False: Moral hazard is unlikely to be present in this situation.

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Answers (1)

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Tony Wheeler · Answer 1

This statement is false.

Explanation:

In the statement above, moral hazard is likely to be present.

Moral hazard means increased exposure to a danger or challenge because of a safety incentive. In economics, the safety incentive is usually financial reward for taking some (unnecessary) risks.

Here, the hikers may feel safer than before because of the lightweight personal locator beacons, and they may venture more while hiking. They may wander off, knowing that the beacons would make them visible to the Forest Services. They may even explore dangerous or forbidden territories.

The goal of the beacons was to make the hikers more noticeable when in danger, but many hikers would see them as a tool to be more adventurous.