A Moral Hazard

A moral hazard

A) refers to the private, self-interested actions that people pursue, which, when taken collectively, lead to a loss in economic surplus.
B) refers to the situation where people tend to take risks after they have entered into a transaction because they know the costs will be borne by the other party in the transaction.
C) refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction.
D) refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction.

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