Which of the following is not an example of a moral hazard problem?
A)A manager stays late one evening so that her employee can leave early to attend his child's music recital.
B)A small child takes an extra cookie from the cookie jar when he thinks his mom isn't watching him closely.
C)An employee plays solitaire on her computer at 4:30 p.m. on a Friday when her boss has left for the day.
D)A customer whose new eyeglasses come with a "60-day insurance policy in case of breakage" leaves her glasses out where her new puppy can chew on them.

Question

Quizplus · Accepted Answer

Option A does not involve any principal-agent relationship or any possibility of one party exploiting the other. It is just a kind gesture by the manager. The other options involve moral hazard problems where one party may take advantage of the other given the opportunity.

Which of the Following Is Not an Example of a Moral