End Of CH Que NO: 3

Euro NCAP carries out crash tests on new cars in order to assess the extent to which they are safer than the minimum required. The cars are given a pe

Euro NCAP carries out crash tests on new cars in order to assess the extent to which they are safer than the minimum required. The cars are given a percentage score in four different categories, including adult occupant protection and child occupant protection. An overall safety rating is then awarded. Based on the test results in 2020, the Volkswagen ID. 3 was judged to be the safest car on the market. If you observed that these cars were more likely to be involved in traffic accidents, could this be an example of adverse selection or moral hazard? Explain.

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