Insurers reduce the problem of moral hazard by limiting coverage of open-ended treatments like psychotherapy or fully elective treatments like some cosmetic surgeries
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An economic system is said to be a
a. market economy if there is substantial central planning. b. traditional economy if it relies on extensive market trading. c. market economy if it relies on self-interested behavior and incentives. d. command economy if it relies on long-standing practices.
If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the horizontal axis. B) The budget line rotates outward from the intercept on the vertical axis. C) The budget line shifts inward without a change in slope. D) The budget line shifts outward without a change in slope.
For a monopoly market, if the Lerner Index is 2, then
A) the monopoly is maximizing its profit. B) the price elasticity of demand is -2. C) the price elasticity of demand is -0.5. D) None of the above.
The parties to a contract will choose to acquire possibly duplicative information if they believe that the increase in economic value being created will exceed the cost of discovering the information
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