1. Resolve the case of Moral Hazard and Uncertainty. See next table

Drive	Carefully	Carelessly
	Prob	loss	Prob	loss
Accident	0.25	$10,000	0.75	$10,000
No accident	0.75	0	0.25	0

2. Make cases when insurance is included or not. Analyze your results

3. For both cases, alter the odds of having an accident or not whether you drive carefully or not. Specifically, you have a 30% chance of having an accident if you drive carefully and a 70% chance of not having an accident if you drive carefully. Reverse these percentages if you drive carelessly.

4. Doesyour initial results change, that is, if the person having insurance has an incentive to drive without caution?