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

Required: 1-a. the marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $9,000. calculate the increase or decrease in net operating income. 1-b. should the advertising budget be increased ? yes no hintsreferencesebook & resources hint #1 check my work 8.value: 1.00 pointsrequired information 2-a. refer to the original data. management is considering using higher-quality components that would increase the variable expense by $2 per unit. the marketing manager believes that the higher-quality product would increase sales by 10% per month. calculate the change in total contribution margin. 2-b. should the higher-quality components be used? yes no