Identify whether any of the following situations is a moral hazard, adverse selection, or principal-agent problem. Explain your reasoning in each case.
a. A person in poor health purchases life insurance.
b. A consumer is taxed on the purchase of a carton of cigarettes.
c. A driver purchases auto insurance and then drives more recklessly.
d. A computer programmer works from home on a fixed salary.

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The Answer of Identify whether any of the following situations is a moral hazard, adverse selection, or principal-agent problem. Explain your reasoning in each case.
a. A person in poor health purchases life insurance.
b. A consumer is taxed on the purchase of a carton of cigarettes.
c. A driver purchases auto insurance and then drives more recklessly.
d. A computer programmer works from home on a fixed salary.

Identify Whether Any of the Following Situations Is a Moral