Consider the following story: when joe didn't have renter's insurance, he was very careful not to leave candles lit in his apartment and locked the door when he left. now that he has renter's insurance, he typically leaves candles burning all day and forgets to lock the door, because he knows that even if his apartment catches on fire or gets broken into, his insurance will cover it. the economic problem in this story is known as:
a. the free-rider problem
b. moral hazard
c. government failure
d. adverse selection

Moral hazard

Explanation: Moral hazard can be defined as a situation when an individual increases his risk even when he has the option to no to, as he knows that he is insured and the potential loss will be bore by someone else.

In the given case Joe starting taking risk of fire as he knew that if there comes any loss, it will be bore by the insurance company. Hence the economic problem in this theory is Moral hazard .

answer; burned it;

when consumers have more money to pay for a product, the most likely situation to occur from the possible options on the list is (2) an increase in price for computer and computer accessories will happen.

companies tend to price products according to production costs, but they also take into account how much money would a consumer in certain segments be willing to pay for their product. if they have more money, the products would definitely be priced higher.