When you rent a car,you might treat it with less care than you would if it were your own.This is an example of
A)market risk.
B)moral hazard.
C)adverse selection.
D)risk aversion.

Question

Quizplus · Accepted Answer

Moral hazard refers to the tendency of an individual to take risks because someone else bears the cost of those risks. In the case of rental cars, the driver is less likely to take care of the car because they do not own it and are not responsible for any damages that may occur. Therefore, the correct answer is B, moral hazard.

When You Rent a Car,you Might Treat It with Less