Louisa is an avid cyclist who is currently working on her business degree. She normally rides a bike worth $600 to class. If Louisa locks her bike carefully-locks both wheels-the chance of theft for the term is 5%, but this careful locking procedure is time consuming. If she is less careful-just quickly locks the frame to a bike rack-the chance of theft is 20%. Louisa is risk averse and is considering buying theft insurance for her bike. There are two types of insurance. With full insurance, Louisa pays the premium and gets the full, $600 value of the bike if it is stolen. Alternatively, with partial insurance, Louisa receives only 75% of the bike's value, $450. if the bike is stolen. Which contract is more likely to induce moral hazard problems? Moral hazard problems are more likely to result from O A. full insurance because Louisa bears less of the consequences of her actions than with partial insurance. O B. full insurance because it is likely more expensive than partial insurance. O C. partial insurance because Louisa is more risk averse than the insurance company. O D. partial insurance because Louisa knows more about how careful she will be than the insurance company. O E. full insurance because insurance companies know more about how likely bike theit is than Louisa. To break even on consumers like Louisa, what price would the risk-neutral insurance company have to charge for full insurance? To break even, the insurance company will have to charge a price of $| | for full insurance. (Enter your response as a whole number.) If we observe Louisa buying partial insurance, what can we say about the trade-off between moral hazard and efficient risk-bearing? If Louisa buys partial insurance, then (relative to full insurance) Louisa will take safety precautions and will bear risk more less Click to select your answer(s)