Answer the essay question, considering the book "The Economics of Health and Health Care" pp 159 – 162.
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Moral hazard refers to the change in the behavior of the consumers due to the existence of some contractual agreement. Obesity is not desirable since it has social as well as economic costs on the individual. An obese individual is more likely to suffer from diseases such as diabetes and the requirement for medical care would be higher for obese persons since obesity affects the normal functioning of the body. While the costs of medical treatment represent economic costs, obesity also creates social costs since the individual would feel sad that he or she does not look attractive and fit in the society...