What is moral hazard?

a. it refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction.
b. it refers to the actions people take after they have entered into a transaction that makes the other party to the transaction worse off.
c. it refers to the private, self-interested actions that people pursue, which when taken collectively leads to a loss in economic surplus.
d. it refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction.

b. It refers to the actions people take after they have entered into a transaction that makes the other party to the transaction worse off.

Explanation:

Moral hazard -

It occurs when the person increases their exposure to risk in the case , when the other person bears the cost of the risks .

It can occur when the action of one of the party changes due to the detriment of the other after the financial transaction is done .

hence ,

The correct answer for Moral Hazard is ( b ) .

you probably know the answer. stop asking stupid questions and making me waste my time. j.k. ; )   b.t.w. what are three ratios equivalent to 5 : 11? thx