At a restaurant offering an "All You Can Eat Buffet" for a fixed price, an example of "moral hazard" might be (choose best answer):

a. The restaurant has a well-known reputation for using low quality ingredients to cut costs b. A busload of senior citizens with small appetites arrives c. After dining, a patron secretly puts food in a bag to take home and eat later d. A diner accidentally leaves his wallet at the buffet e. A busload of football players with enormous appetites arrives

Banks issuing credit cards usually impose limits on how much credit they will extend to cardholders. A good reason for imposing a limit might be to (choose best answer):

a. There is a moral hazard problem with no limit, since borrowers are more likely to spend past their ability to pay, leaving the bank to cover the cardholder's pending excesses. b. There is a moral hazard problem where the bank repossesses the cardholder's car that was purchased using the bank issued credit card c. There is an adverse selection problem where more risky cardholders are more likely to apply for cards with limits d. There is an adverse selection problem where more risky cardholders carry lots of credit cards e. The limit is a screen since riskier borrowers are more likely to accept the limit