Moral hazard is not a significant problem in markets.

Question

Quizplus · Accepted Answer

Moral hazard can occur in markets when one party is shielded from the risk associated with a decision or action, leading to a greater willingness to take risks or engage in undesirable behaviors. For example, insurance can create moral hazard when individuals take risks knowing that they will be covered by the insurance policy. Therefore, moral hazard can be a significant problem in markets.

Moral Hazard Is Not a Significant Problem in Markets