[Solved] B. Identifytheprincipal,theagentandthemor

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B. Identifytheprincipal,theagentandthemoralhazardinherentineachofthefollowingsituations. Inordertoreducepersonalinjuryclaims,insurancecompaniessuccessfullylobbylegislatorstopasslawsrequiringtheuseofseatbeltsinautomobiles.[2.5marks] Auniversityprovidesfreeemployeehealthinsurance,whichreducesthedirectcosttothefacultyandstaffofvisitingthedoctorandthedentist.[2.5marks]

B. Identifytheprincipal,theagentandthemoralhazardinherentineachofthefollowingsituations.

Inordertoreducepersonalinjuryclaims,insurancecompaniessuccessfullylobbylegislatorstopasslawsrequiringtheuseofseatbeltsinautomobiles.[2.5marks]

Auniversityprovidesfreeemployeehealthinsurance,whichreducesthedirectcosttothefacultyandstaffofvisitingthedoctorandthedentist.[2.5marks]

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