Saving Lives Can be Dangerous questions 1. Explain the concept of moral hazard and discuss examples. 2. How do insurance companies try to combat the problem of moral hazard? Explain. 3. Explain the implications of moral hazard for the effectiveness of government regulations designed to promote safety and health and give examples. Rational Ignorance 1. Explain the concept of rational ignorance and why it occurs. 2. Explain why special-interest groups dominate the political process. 3. Use the concept of rational ignorance to explain why government policies are not always the best or most efficient ones possible