The introduction of seat belts increased the number of accidents,even though the number of fatalities decreased.This is most likely a result of
A)Moral hazard
B)Adverse selection
C)seat belts distracting drivers
D)None of the above

Question

The introduction of seat belts increased the number of accidents,even though the number of fatalities decreased.This is most likely a result of​
A)​Moral hazard
B)Adverse selection
C)seat belts distracting drivers
D)​None of the above

Quizplus · Accepted Answer

This is a case of moral hazard. Drivers may feel more protected by seat belts and therefore take more risks while driving, leading to an increase in accidents. However, the number of fatalities still decreased due to the protection provided by seat belts in the event of an accident. Adverse selection and seat belts distracting drivers are not likely causes of this phenomenon.

The Introduction of Seat Belts Increased the Number of Accidents,even