1.In the market for insurance, the moral-hazard problem is that                  encourages                    . 2. While shopping for office equipment, an office manager sees a display of fire...

1.In the market for insurance, the moral-hazard problem is that
encourages
.

2. While shopping for office equipment, an office manager sees a display of fire extinguishers. After making a single phone call, the manager decides not to buy a fire extinguisher. The manager had called her
and asked,
  “ ?”

3. Many professional athletes purchase insurance against career-ending injuries. We expect the insured players to experience
(more/fewer) injuries than uninsured players.

4.If the single firm providing bicycle theft insurance on campus disappears and is not replaced, we would expect bicycle theft rates on campus to
.

5. Car insurance increases traffic because insured drivers . (Related to Application 4 on page 653.)