Chapter 11 Moral Hazard3 10.The fact that more free-plan participants logged ER visits for broken bones than cost-sharing plan participants in the RAND Health Insurance Experi- ment is evidence of moral hazard. TRUE.Moral hazard occurs when health insurance induces customers to be less careful with their health or induces them to seek more treatment when they do get hurt. 11.Anall-you-can-eat buffetisa classicexample of moralhazard,becauseaprice distortion induces overconsumption FALSE.Moral hazard only occurs in the presence of asymmetric information. The restaurant could easily charge customers marginal costs for the food they eat,so the fact that they choose not to do so indicates there is something eco- nomically valuable about the all-y other way,ban- 3 Bhattacharya,Hyde &Tu013 Chapter 11| Moral Hazard | 3 10. The fact that more free-plan participants logged ER visits for broken bones than cost-sharing plan participants in the RAND Health Insurance Experi￾ment is evidence of moral hazard. TRUE. Moral hazard occurs when health insurance induces customers to be less careful with their health or induces them to seek more treatment when they do get hurt. 11. An all-you-can-eat buffet is a classic example of moral hazard, because a price distortion induces overconsumption. FALSE. Moral hazard only occurs in the presence of asymmetric information. The restaurant could easily charge customers marginal costs for the food they eat, so the fact that they choose not to do so indicates there is something eco￾nomically valuable about the all-you-can-eat system. Put another way, ban￾ning all-you-can-eat buffets would not increase social welfare. 3 ￾c Bhattacharya, Hyde & Tu 2013